v3.22.0.1
Business Segments
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Business Segments
Note 25.
Business Segments
The firm reports its activities in four business segments: Investment Banking, Global Markets, Asset Management and Consumer & Wealth Management. See Note 1 for information about the firm’s business segments.
Compensation and benefits expenses in the firm’s segments reflect, among other factors, the overall performance of the firm, as well as the performance of individual businesses. Consequently,
pre-tax
margins in one segment of the firm’s business may be significantly affected by the performance of the firm’s other business segments.
The firm allocates assets (including allocations of global core liquid assets and cash, secured client financing and other assets), revenues and expenses among the four business segments. Due to the integrated nature of these segments, estimates and judgments are made in allocating certain assets, revenues and expenses. The allocation process is based on the manner in which management currently views the performance of the segments.
The allocation of common shareholders’ equity and preferred stock dividends to each segment is based on the estimated amount of equity required to support the activities of the segment under relevant regulatory capital requirements.
Net earnings for each segment is calculated by applying the firmwide tax rate to each segment’s
pre-tax
earnings.
Management believes that this allocation provides a reasonable representation of each segment’s contribution to consolidated net earnings to common, return on average common equity and total assets. Transactions between segments are based on specific criteria or approximate third-party rates.
Segment Results
The table below presents a summary of the firm’s segment results.
 
    Year Ended December  
       
$ in millions
  
 
2021
 
      2020        2019  
Investment Banking
                          
Non-interest
revenues
  
 
$14,425
 
      $  9,158        $  7,079  
Net interest income
  
 
451
 
      265        520  
Total net revenues
  
 
14,876
 
      9,423        7,599  
Provision for credit losses
  
 
(298
) 
      1,624        333  
Operating expenses
  
 
6,705
 
      6,134        4,685  
Pre-tax
earnings
  
 
$  8,469
 
      $  1,665        $  2,581  
Net earnings
  
 
$  6,775
 
      $  1,262        $  2,065  
Net earnings to common
  
 
$  6,705
 
      $  1,193        $  1,996  
Average common equity
  
 
$10,341
 
      $11,313        $11,167  
Return on average common equity
  
 
64.8%
 
      10.5%        17.9%  
 
Global Markets
                          
Non-interest
revenues
  
 
$19,309
 
      $18,928        $13,109  
Net interest income
  
 
2,768
 
      2,229        1,670  
Total net revenues
  
 
22,077
 
      21,157        14,779  
Provision for credit losses
  
 
45
 
      274        35  
Operating expenses
  
 
12,969
 
      12,806        10,851  
Pre-tax
earnings
  
 
$  9,063
 
      $  8,077        $  3,893  
Net earnings
  
 
$  7,250
 
      $  6,122        $  3,114  
Net earnings to common
  
 
$  6,973
 
      $  5,766        $  2,729  
Average common equity
  
 
$45,497
 
      $40,760        $40,060  
Return on average common equity
  
 
15.3%
 
      14.1%        6.8%  
 
Asset Management
                          
Non-interest
revenues
  
 
$14,366
 
      $  7,743        $  8,454  
Net interest income
  
 
550
 
      241        511  
Total net revenues
  
 
14,916
 
      7,984        8,965  
Provision for credit losses
  
 
18
 
      442        274  
Operating expenses
  
 
5,970
 
      5,142        4,817  
Pre-tax
earnings
  
 
$  8,928
 
      $  2,400        $  3,874  
Net earnings
  
 
$  7,143
 
      $  1,819        $  3,099  
Net earnings to common
  
 
$  7,046
 
      $  1,740        $  3,013  
Average common equity
  
 
$25,195
 
      $20,491        $21,575  
Return on average common equity
  
 
28.0%
 
      8.5%        14.0%  
 
Consumer & Wealth Management
                          
Non-interest
revenues
  
 
$  4,769
 
      $  3,980        $  3,542  
Net interest income
  
 
2,701
 
      2,016        1,661  
Total net revenues
  
 
7,470
 
      5,996        5,203  
Provision for credit losses
  
 
592
 
      758        423  
Operating expenses
  
 
6,294
 
      4,901        4,545  
Pre-tax
earnings
  
 
$    
 
584
 
      $     337        $     235  
Net earnings
  
 
$    
 
467
 
      $     256        $     188  
Net earnings to common
  
 
$    
 
427
 
      $     216        $     159  
Average common equity
  
 
$10,796
 
      $  8,012        $  6,292  
Return on average common equity
  
 
4.0%
 
      2.7%        2.5%  
 
Total
                          
Non-interest
revenues
  
 
$52,869
 
      $39,809        $32,184  
Net interest income
  
 
6,470
 
      4,751        4,362  
Total net revenues
  
 
59,339
 
      44,560        36,546  
Provision for credit losses
  
 
357
 
      3,098        1,065  
Operating expenses
  
 
31,938
 
      28,983        24,898  
Pre-tax
earnings
  
 
$27,044
 
      $12,479        $10,583  
Net earnings
  
 
$21,635
 
      $  9,459        $  8,466  
Net earnings to common
  
 
$21,151
 
      $  8,915        $  7,897  
Average common equity
  
 
$91,829
 
      $80,576        $79,094  
Return on average common equity
  
 
23.0%
 
      11.1%        10.0%  
In the table above:
 
•  
Revenues and expenses directly associated with each segment are included in determining
pre-tax
earnings.
 
•  
Net revenues in the firm’s segments include allocations of interest income and expense to specific positions in relation to the cash generated by, or funding requirements of, such positions. Net interest is included in segment net revenues as it is consistent with how management assesses segment performance.
 
•  
Total operating expenses included net provisions for litigation and regulatory proceedings of $534 million for 2021, $3.42 billion for 2020 and $1.24 billion for 2019, primarily reflected in Investment Banking and Global Markets.
 
•  
Overhead expenses not directly allocable to specific segments are allocated ratably based on direct segment expenses.
 
•  
Effective January 1, 2021, the allocation of attributed equity among the firm’s segments was updated to reflect the results of the firm’s 2020 Comprehensive Capital Analysis and Review process. The average common equity balances above incorporate such impact, as well as the changes in the size and composition of assets held in each of the firm’s segments that occurred during 2021. See Note 20 for information about the firm’s updated SCB, which became effective on October 1, 2021.
The table below presents depreciation and amortization expense by segment.
 
    Year Ended December  
       
$ in millions
  
 
2021
 
      2020        2019  
Investment Banking
  
 
$  
 
195
 
      $   174        $   139  
Global Markets
  
 
772
 
      611        646  
Asset Management
  
 
675
 
      740        618  
Consumer & Wealth Management
  
 
373
 
      377        301  
Total
  
 
$2,015
 
      $1,902        $1,704  
Segment Assets
The table below presents assets by segment.
 
    As of December  
     
$ in millions
  
 
2021
 
      2020  
Investment Banking
  
 
$  
 
144,157
 
      $   116,242  
Global Markets
  
 
1,082,378
 
      844,606  
Asset Management
  
 
91,115
 
      95,751  
Consumer & Wealth Management
  
 
146,338
 
      106,429  
Total
  
 
$1,463,988
 
      $1,163,028  
The table below presents gross loans by segment and loan type, and allowance for loan losses by segment.
 
    As of December  
     
$ in millions
  
 
2021
 
      2020  
Investment Banking
                 
Corporate
  
 
$
     
30,421
 
      $     27,866  
Loans, gross
  
 
30,421
 
      27,866  
Allowance for loan losses
  
 
(866
) 
      (1,322 ) 
Loans
  
 
29,555
 
      26,544  
 
Global Markets
                 
Corporate
  
 
18,578
 
      13,248  
Real estate
  
 
34,986
 
      16,915  
Other
  
 
7,838
 
      3,499  
Loans, gross
  
 
61,402
 
      33,662  
Allowance for loan losses
  
 
(486
) 
      (448 ) 
Loans
  
 
60,916
 
      33,214  
 
Asset Management
                 
Corporate
  
 
6,928
 
      7,545  
Real estate
  
 
6,810
 
      9,125  
Other
  
 
692
 
      675  
Loans, gross
  
 
14,430
 
      17,345  
Allowance for loan losses
  
 
(732
) 
      (787 ) 
Loans
  
 
13,698
 
      16,558  
 
Consumer & Wealth Management
                 
Wealth management
  
 
43,998
 
      33,023  
Installment
  
 
3,672
 
      3,823  
Credit cards
  
 
8,212
 
      4,270  
Loans, gross
  
 
55,882
 
      41,116  
Allowance for loan losses
  
 
(1,489
) 
      (1,317 ) 
Loans
  
 
54,393
 
      39,799  
 
Total
                 
Loans, gross
  
 
162,135
 
      119,989  
Allowance for loan losses
  
 
(3,573
) 
      (3,874 ) 
Loans
  
 
$
   
158,562
 
      $   116,115  
See Note 9 for further information about loans.
Geographic Information
Due to the highly integrated nature of international financial markets, the firm manages its businesses based on the profitability of the enterprise as a whole. The methodology for allocating profitability to geographic regions is dependent on estimates and management judgment because a significant portion of the firm’s activities require cross-border coordination in order to facilitate the needs of the firm’s clients. Geographic results are generally allocated as follows:
 
•  
Investment Banking: location of the client and investment banking team.
 
•  
Global Markets: FICC and Equities intermediation: location of the market-making desk; FICC and Equities financing (excluding prime brokerage financing): location of the desk; prime brokerage financing: location of the primary market for the underlying security.
 
•  
Asset Management (excluding Equity investments and Lending and debt investments): location of the sales team; Equity investments: location of the investment; Lending and debt investments: location of the client.
 
•  
Consumer & Wealth Management: Wealth management: location of the sales team; Consumer banking: location of the client.
The table below presents total net revenues,
pre-tax
earnings and net earnings by geographic region.
 
$ in millions
  
 
2021
 
     2020       2019  
Year Ended December
                                                
Americas
  
 
$37,379
 
  
 
63%
 
     $27,508       62%       $22,148       60%  
EMEA
  
 
14,372
 
  
 
24%
 
     10,868       24%       9,745       27%  
Asia
  
 
7,588
 
  
 
13%
 
     6,184       14%       4,653       13%  
Total net revenues
  
 
$59,339
 
  
 
100%
 
     $44,560       100%       $36,546       100%  
 
Americas
  
 
$17,476
 
  
 
65%
 
     $  9,019       72%       $  6,623       62%  
EMEA
  
 
7,062
 
  
 
26%
 
     3,041       25%       3,349       32%  
Asia
  
 
2,506
 
  
 
9%
 
     419       3%       611       6%  
Total
pre-tax
earnings
  
 
$27,044
 
  
 
100%
 
     $12,479       100%       $10,583       100%  
 
Americas
  
 
$13,927
 
  
 
65%
 
     $  7,468       79%       $  5,514       65%  
EMEA
  
 
5,695
 
  
 
26%
 
     2,090       22%       2,600       31%  
Asia
  
 
2,013
 
  
 
9%
 
     (99 )      (1)%       352       4%  
Total net earnings
  
 
$21,635
 
  
 
100%
 
     $  9,459       100%       $  8,466       100%  
In the table above:
 
•  
Asia
pre-tax
earnings and net earnings for 2020 and 2019 were impacted by net provisions for litigation and regulatory proceedings.
 
•  
Substantially all of the amounts in Americas were attributable to the U.S.
 
•  
Asia includes Australia a
n
d New Zealand.