Goldman Sachs' revenue and profit shrank in the fourth quarter as a result of a large legal settlement, as well as turmoil in the markets.
The Wall Street firm said Wednesday that revenue fell 5 percent in the fourth quarter of 2015 from the quarter a year ago. For the year, revenue declined 2 percent. The bank, considered by many to be the most elite firm in the industry, had its business opportunities diminished by new regulations and volatility in the global markets.
The lower revenue helped push the bank's fourth-quarter profit down to $765 million, or $1.27 a share, compared with $2.17 billion, or $4.38 a share, in the final quarter of 2014.
The bank's profits were dragged down by a recent government settlement over mortgage securities the bank produced before the financial crisis. Goldman said that $1.8 billion in provisions for the settlement reduced fourth-quarter earnings by $3.41 a share. Analysts polled by Thomson Reuters had expected a profit of $3.53 a share.
Goldman's profits for the year as a whole declined 31 percent to $5.6 billion.
Goldman's business advising companies continued to perform well, growing 27 percent from a year earlier. But nearly every other major business line produced smaller revenue, including the stock trading division that has done so well in recent quarters.
"We are pleased that our diversified business mix allowed us to deliver solid results in a year characterized by uneven global economic activity," the firm's chief executive, Lloyd Blankfein, said in a statement. "Looking ahead, we believe our strong global client franchise leaves us well positioned to generate superior returns over the long term."
Goldman Sachs' merger-advisory business benefited from a record $3.8 trillion of deals globally in 2015, surpassing the previous record set in 2007, according to data compiled by Bloomberg. The firm said last week that it reached a $5.1 billion agreement in principle on the mortgage case, cutting fourth-quarter profit and closing out a year of record legal and litigation costs.
Goldman added 2,800 employees in 2015, Chief Financial Officer Harvey Schwartz told investors on a conference call. "A little more than half was due to our continued investment in regulatory compliance," he said.
Information for this article was contributed by Dakin Campbell and Michael P. Regan of Bloomberg News.
Business on 01/21/2016