Goldman Sachs Group's profit plunged for the second quarter in a row as bond trading revenue fell by a third amid market turmoil stemming from concerns about global growth.
Revenue fell in all of the bank's major businesses except investment banking, which benefited from a surge in takeovers.
The results are the latest example of how the grim trading environment is gutting Wall Street.
Turbulent trading due to worries about the knock-off effect of China's cooling economy, was aggravated by uncertainty over the timing of a US interest rate rise.
"We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth," the bank's chief executive Lloyd Blankfein said.
Goldman said revenue from fixed-income, currency and commodity (FICC) trading, fell 33% to $1.46 billion, the biggest annual drop since the third quarter of 2013.
Excluding adjustments, revenue would have fallen 27%.
Goldman joins JPMorgan Chase & Co, Bank of America and Citigroup in reporting a drop in revenue from bond trading.
Both JPMorgan and Bank of America reported 11% declines in FICC revenue, while Citi's revenue from the business fell about 16%.
Goldman said its net income fell 38% to $1.33 billion, or $2.90 per share, from $2.14 billion, or $4.57 per share, a year earlier.
Analysts had expected earnings of $2.91 per share for the third quarter ended September 30, according to Thomson Reuters I/B/E/S.
The bank said its net revenue fell 18.2% to $6.86 billion, far short of the average estimate of $7.12 billion.
Goldman has stressed the bank's commitment to trading, even as other banks have pulled back or exited the business to focus on less-volatile activities that require less capital.
New rules aimed at improving the stability of the banking system also discourage banks from trading off their own balance sheets. FICC contributed just 21.3% to revenue in the latest quarter, compared with about 40% at its peak.
One bright spot was investment banking. Revenue in Goldman's investment banking unit, which underwrites debt and stock offerings and advises on deals, rose 6.3% to $1.56 billion.
The bank led US target merger and acquisition advisory work this year with 124 deals worth $522.2 billion as of September 18, according to Thomson Reuters data. JP Morgan was second with $460.4 billion.
A total of 54 deals greater than $5 billion had been announced in the US by the middle of September, a 68%increase from the same period last year.
Revenue from equities trading rose 9% to $1.75 billion, matching the performance of JPMorgan.
Citi's revenue from the business rose 31%, however, while Bank of America's increased 12%.
However, Goldman's equity underwriting revenue experienced its weakest quarter in three years, more than halving to $190m as many firms delayed going public in a stormy market.
IPO activity in the US this year totaled $24.5 billion as at October 9, down 42% compared to the same timelast year, according to Thomson Reuters data.
Last month the bank said that CEO Lloyd Blankfein has a "highly curable" form of lymphoma, and would be able to work substantially as normal during treatment. Treatment includes chemotherapy over the next several months in New York.
He has been the bank's chairman and CEO since 2006.
