⚠ Holding the Loans When Markets ShutModerate threat

Goldman Sachs (GS) — threat to the moat

The bank that leads leveraged lending is the one holding the loans when a buyout cannot be sold.

Being first in leveraged lending1 means being first in line when a financing cannot be sold. Loans that were meant to be distributed stay on the balance sheet, and their marks move with credit markets.

Provision for credit losses ($M)671H1 2025417H1 2026Goldman Sachs Q2 2026 earnings release
Credit costs low so far.

The balance sheet is already carrying more. Firm loans rose from $196 billion at the end of 2024 to about $261 billion in June 202623, and Standardized risk-weighted assets reached $790,640 million4. Higher credit risk-weighted assets were one reason the CET1 ratio fell5.

The second quarter's provision of $102 million compared with $315 million in the first quarter6, and it came mainly from wholesale loans rather than cards7. The source of credit cost is shifting toward exactly the corporate lending this page is about.

Loans rose by $8 billion in the second quarter alone, to $261 billion8. Every quarter of growth adds to what would have to be held if the syndication market closed.

The firm's provision was small in the first half of 2026, $417 million against $671 million a year earlier9. The warning would be a quarter of losses in the markets businesses on loans held for distribution, together with provisions above $600 million.

References
  1. ReportedBeing first in leveraged lending means being first in line when a financing cannot be sold.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - league tables, wallet share and client rankings. — FY2025 · publ. 15 January 2026 · source ↗
  2. ReportedFirm loans rose from $196 billion at the end of 2024 to about $261 billion in June 2026, and Standardized risk-weighted assets reached $790,640 million.
    Goldman Sachs full-year and fourth-quarter 2025 earnings results, Form 8-K exhibit 99.1 - net revenues by region, net interest income, deposits, loans, AUS rollforward, capital returned and Apple Card effects. — FY2025 · publ. 15 January 2026 · source ↗
  3. ReportedFirm loans rose from $196 billion at the end of 2024 to about $261 billion in June 2026, and Standardized risk-weighted assets reached $790,640 million.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  4. ReportedFirm loans rose from $196 billion at the end of 2024 to about $261 billion in June 2026, and Standardized risk-weighted assets reached $790,640 million.
    Goldman Sachs Form 10-Q for the quarter ended 30 June 2026 - segment pre-tax earnings and ROE, capital ratios and requirements, investment banking backlog, and the Industry Ventures and Innovator acquisitions. — Q2 2026 · publ. 3 August 2026 · source ↗
  5. ReportedHigher credit risk-weighted assets were one reason the CET1 ratio fell.
    Goldman Sachs Form 10-Q for the quarter ended 30 June 2026 - segment pre-tax earnings and ROE, capital ratios and requirements, investment banking backlog, and the Industry Ventures and Innovator acquisitions. — Q2 2026 · publ. 3 August 2026 · source ↗
  6. ReportedThe second quarter's provision of $102 million compared with $315 million in the first quarter, and it came mainly from wholesale loans rather than cards.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  7. ReportedThe second quarter's provision of $102 million compared with $315 million in the first quarter, and it came mainly from wholesale loans rather than cards.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  8. ReportedLoans rose by $8 billion in the second quarter alone, to $261 billion.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  9. ReportedThe firm's provision was small in the first half of 2026, $417 million against $671 million a year earlier.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 28, 2026