GOLDMAN SACHS's profit tanked in the second quarter as the investment banking giant continued to struggle with the downturn in M&A activity while booking rising costs.

Profit in the second quarter fell to $1.1bn (£0.85bn), 62 per cent lower than last year while revenue fell eight per cent.

The drop was primarily driven by a decline in Goldman's core business areas. Investment banking fees fell 20 per cent compared to last year, with a particularly steep fall in advisory revenue. Goldman also reported a 26 per cent fall in revenue from fixed income, an area of weakness for many banks this quarter.

The fall in advisory revenue reflected "a significant decline in industry-wide completed M&A transactions," the bank said. Chair and chief executive David Solomon (pictured) said the results were "solid" in a time of "cyclically low activity levels".

Goldman's operating expenses were 12 per cent higher than last year due to writedowns.

The results come off the back of a difficult start to the year for Goldman. In the first quarter, profit dropped by $2bn year-on-year due to the steep decline in dealmaking Dealmaking has stayed subdued in 2023 after 2022 was hit by inflation and geopolitical volatility. Overall global M&A value is down 44 per cent in the first five months of 2023.

(c) 2023 City A.M., source Newspaper