Arizona Tribune - Goldman Sachs profits hit by big drop in mergers

The big investment bank pointed to a "significant decline" in completed mergers and acquisitions as fewer big companies bought rivals and the number of initial public offerings fell sharply compared with recent years.

Goldman Sachs also cited a fall in equity and debt underwriting as a factor in the profit decline.

Net income was $1.2 billion, down 69 percent following a 16 percent fall in revenues to $10.6 billion.

Goldman's profit drop comes on the heels of a trove of mixed results last week from other financial giants, with some large banks pointing to a "mild recession" as a likely scenario.

Goldman's asset and wealth management business was dented by lower revenues in equity and debt investments.

Other headwinds were due to much higher provisions tied to its consumer credit card business, as well as elevated expenses for employee compensation.

In October, Goldman announced it was streamlining businesses to three operating segments from four, a move that reorganizes its "Marcus" consumer business, which had hit obstacles.

Chief Executive David Solomon pointed to a "challenging economic backdrop," saying the firm's "focus is realizing the benefits of our strategic realignment, which will strengthen our core businesses, scale our growth platforms and improve efficiency."

Shares fell 2.5 percent to $364.67 in pre-market trading.

M.O.Allen--AT