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Chart 55: What would get you more interested in investing in GS stock? 60% 50% 40% 30% 20% 10% 0% Astronger revenue Normalizing regulations —_ Investing to drive Additional expense backdrop and ability to return improving returns reductions more capital Source: BofA Merrill Lynch Global Research « Management focused the presentation on Marcus, Goldman’s new consumer lending effort. This venture has significant potential with an unsecured consumer loan target market of $850B and Goldman coming to the market with a unique skillset of technology and risk management, no channel conflicts or bricks and mortar, a strong balance sheet that can provide loans at a meaningful discount to peers, and a long history in the financial markets with a strong brand. When fully ramped up, this unit could produce pre-tax ROA’s of 3-4%, and assuming 9-11% equity commitments, this could translate into a high teens ROE. ¢ — Given the positive sector/GS stock reaction post the election, management was asked on what they thought about the future of current regulation and activity levels. While they said it is too early to tell the impact, a lower corporate tax rate would benefit GS some, a pro-growth policy could positively impact confidence/activity levels, and some de-regulation could ease some of the operational challenges, though much of the regulation was well intended and has created a stronger industry. ¢ Interms of the current environment, GS didn’t give an exact update, but said activity has been healthy and around the election activity was similar to around Brexit (slow before and very active post). Most other firms also mentioned positive trends in 4Q, with normal seasonality, but up materially year over year. Asset Managers Top 5 Takeaways Invesco (IVZ), C-1-7, Buy Presenting from IVZ was Loren Starr, CFO. Overall Loren was optimistic on the outlook for IVZ to generate above average organic growth given its product mix and performance, deliver cost savings, and accelerate buybacks, and does not expect a significant change in the DOL impact from the election. e When asked what would get investors more excited about investing in IVZ stock, the majority of respondents said that a consistent above average organic growth rate would get them most excited (48%), followed by a more favorable market backdrop (38%), less regulation (10%), and more operating leverage (5%), while nobody said longer term FX hedged would get them more interested. eat Bankof America 36 2016 Future of Financials Conference | 17 November 2016 Merrill Lynch HOUSE_OVERSIGHT_014350