“Corporate activity and capital formation are core to our financial system,” David Solomon said Wednesday, on Goldman’s analyst call.

His remarks in that regard echoed those from Morgan Stanley’s James Gorman and the general theme from Wall Street’s Q2 earnings, which suggested that ECM is already seeing green shoots, and M&A could be next.

Solomon talked up “a number of structural catalysts that should lead to increased levels of activity.” Goldman is seeing a “pick up in a few spots already.” Those spots: Equity capital markets and M&A dialogue. Analysts queried Solomon repeatedly on that alleged pick up and got different versions of the same general answer.

Of course, what markets wanted from Solomon on Wednesday was color on the firm’s real estate writedowns and the future of Platform Solutions, which is starting to look like Goldman’s version of Meta’s Reality Labs — a perpetual blight on quarterly results and a loss-making reminder of the CEO’s worst idea. (At least Goldman didn’t change its name.)

If you missed the firm’s report, I strongly encourage you to review my recap here. Suffice to say property markdowns and an impairment charge tied to the disposal of the installment lender Goldman bought two years ago led to a 60% drop in profits.

Below, find a selection of quotes from the call, during which Solomon and CFO Denis Coleman attempted to explain what, exactly, is going on at the firm. Note that Mike Mayo, never one to shy away from asking the tough (read: aggravating and abrasive) questions, wondered if Q2 was in fact the low point for Goldman.

Coleman on real estate: We had roughly $305 million of net losses in our private portfolio, primarily due to markdowns on investments in office-related commercial real estate and approximately $100 million of net losses in our public portfolio, largely driven by a loss related to a historical principal investment that we sold out of during the quarter. Importantly, we have now reduced the public portfolio to approximately $1 billion, down from more than $4.5 billion in 2021. We also experienced approximately $485 million of impairments on our real estate-related CIE portfolio which are reflected in operating expenses.

We took a $504 million impairment charge on the goodwill associated with consumer platforms this quarter in connection our exploration of a potential sale of the GreenSky business. We will continue to evaluate its intangibles for impairment and should we decide to sell the business, we will also make a determination regarding moving Greensky to held for sale, similar to the action we took last quarter with respect to our markets unsecured loan portfolio. We will share further updates as appropriate.

CRE loans represent a relatively small percentage of our overall lending book, roughly 15%. And we are well diversified by property type with only 1% in the office category. We conducted a comprehensive asset-by-asset review of this portfolio this quarter and we have incorporated the feedback from our sell-down process. Office-related exposure represents approximately 2% of the aggregate portfolio and equity securities loans and debt securities and approximately 15% of the CIE investments in other category net of financings.

Overall, the CRE investments are diversified across geographies and positions with no single position representing more than 1% of the total on-balance sheet alternative investments. Furthermore, 50% of these investments are historical principal investments that we intend to exit over the medium term. We continue to remain highly focused on the overall risk management of this portfolio.

Solomon on consumer:  We made the difficult but appropriate decision over a year ago… to narrow our consumer ambitions and kind of rolled out in the fall the direction of travel and have been executing on that. And that included the wind down and the execution of the markets, the sale of the Marcus loan portfolio which has now been completed and obviously exploring options for GreenSky, which we’ve been transparent on. We’ve also said very clearly that our credit card partnerships are long-term partnerships. We don’t have unilateral rights with them. They definitely can operate better. We’ve been working hard to improve the operation of them which will reduce the drag and we’re making good progress on that. And we’re working with Apple and also with GM to do that. And so there’s a significant focus on reducing that drag. And the drag of those credit card partnerships has gotten smaller and it will continue to be reduced as we move forward into 2024. We continue to have a very strong deposit platform. We launched an Apple savings platform which also was a successful launch to grow our deposit base. And so we’ll continue to grow deposits and that’s the course that we’re on at the moment.

UBS’s Brennan Hawken: You started the process of selling GreenSky. We saw the goodwill impairment. What’s been the reception to that asset? And has that impacted your expectation for how quickly you could finalize that sale?

Coleman: Brennan, in terms of the process, we’re obviously in the middle of [it]. We have feedback. I think extra color, just to share with you in terms of how you think about [the] potential on the forward. It’s a business we bought for $1.7 billion. We integrated it into Goldman Sachs. We’re seeing it perform well. It’s a good business. We had made the decision to explore alternatives because it’s not the right fit necessarily for Goldman Sachs. We’ve written down the goodwill in the Consumer platform segment. There’s no more goodwill to be written down. That business at this point has remaining unamortized intangibles approximately $625 million that we consider for impairment on a quarterly basis and we’ll do so in the future. And should we move forward with the transaction with respect to GreenSky, it could happen in a number of different ways. We could sell the platform, we could sell the platform and the historical lending book that we have on balance sheet. And should we choose to sell the loan book, we’ll designate that as held for sale, much like the Marcus loans process and you’ll see the P&L impact accordingly as we mark the loans and release the associated reserve. So those are the types of things that could occur on the forward given the strategic activity but I don’t think there’s anything else to say about the GreenSky process given where we are.

Wells Fargo’s Mayo: The big picture question for David is simply, is this as bad as it gets?

Solomon: Mike, to your bigger question, this was a meaningful quarter of putting some things that we strategically decided to do behind us. With respect to the balance sheet, I think one of the things that’s very important to call out, this is an environment at the moment that’s been hard on that legacy balance sheet. We are reducing the legacy balance sheet but we could just as well next quarter — if the environment improves — see positive revenues from that legacy balance sheet too. But if the environment got worse, we still have balance sheet to reduce. So I’ve been around the firm a long time. This was obviously a tough quarter but we also had one-off items that we put in. We’re going to continue to give you transparency on the legacy balance sheet and we’re going to continue to move forward. I think the environment feels better, if the environment feels better and the environment turns out to be better, you’ll see better performance. But I feel very, very good about the strategic decisions that we’re making, the execution that we’re working on, the progress we’re making in asset and wealth management and we as a leadership team see a clear path to improvement in a better operating environment.