Goldman Sachs Group Inc's fourth quarter profit fell nearly 13% and missed market expectations on Tuesday as weak trading activity dampened a bumper year for deals, sending Wall Street's premier investment bank down 3%.
Goldman's trading unit reported a lower profit in the quarter ended Dec. 31 compared to last year, as a stable economy resulted in less volatility and fewer swings in financial markets.
Revenues of nearly $4 billion were down 7%, according to the global markets business, which now houses the trading business and accounts for about a third of overall revenue.
Equity underwriting revenue fell 8% in the quarter due to lower income from secondary stock offerings, compared to a strong year-ago quarter when trading volumes skyrocketed.
Goldman reported a 45% increase in investment banking revenue to $3.80 billion after its top rainmakers reported record fees from advising on some of the largest mergers, initial public offerings and deals involving special purpose acquisition companies.
Net earnings for common shareholders fell to $3.81 billion in the quarter ended December 31, from $4.36 billion a year ago. Earnings per share fell to $10.81 from $12.08 a year ago.
According to Refinitiv data, analysts on average had expected a profit of $11.76 per share.
On Friday, both Citigroup Inc and JPMorgan Chase Co beat analyst profit estimates. A stellar performance at investment banking has softened the impact, as JPMorgan, the country's largest lender, was hurt by a slowdown in its trading arm.