NEW YORK - Goldman Sachs reported a steep drop in second-quarter profits Wednesday as it continued to struggle with an anaemic merger and acquisition market and weakness in trading.

Profits came in at US$1.1 billion, down 62% from the year-ago period. Revenues fell eight percent to US$10.9 billion.

The big investment bank, which has essentially abandoned a once-touted push to compete with retail banks for Main Street consumers, pointed to a “significant decline in industry-wide completed mergers and acquisitions transactions” as a drag on its critical global banking and markets division.

Revenues also tumbled in trades connected to fixed income, commodities and currencies; revenues were flat in equities trading.

Goldman also suffered a drop in its other main division, asset and wealth management, citing net losses and markdowns in real estate.

In a June interview on CNBC, Goldman Sachs Chief executive David Solomon had warned of the hit to commercial real estate in the wake of higher interest rates and a shift to remote work.

Solomon has come under scrutiny over his management of the bank’s consumer banking business, which was begun by predecessor Lloyd Blankfein but aggressively expanded by Solomon.

A recent Wall Street Journal expose described the storied firm as at “war with itself,” highlighting widespread complaints of partners about Solomon, who championed the acquisition of fintech platform GreenSky in 2021, an asset the bank now plans to divest.

Shares of Goldman dipped 0.1% to US$336.95 in pre-market trading. - Nampa/AFP