Goldman Sachs Group today unveiled a plan to reorganise its business into three units in another overhaul in less than three years by the Wall Street giant.
The US bank also reported a smaller-than-expected 44% slump in third-quarter profit.
The bank will now have three operating segments - asset and wealth management, global banking and markets and platform solutions. Goldman did not give details about the executives who will lead the units.
The reshuffle comes as the investment bank seeks to boost its income from fee-based businesses at a time when rising interest rates have dented valuations and deal-making.
"It's time to be cautious," Goldman Sachs' chief executive David Solomon said in an interview to CNBC referring to the state of the economy.
"You have to expect that there's more volatility on the horizon now. That doesn't mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there's a good chance we have a recession in the United States," he said.
The bank rounds out a mixed quarter for big US banks, in which choppy capital markets and slowing economic growth weakened investment banking.
Dealmaking slowed in the quarter, casting a pall over some of Goldman's most lucrative businesses. However, rising borrowing costs resulted in a 31% surge in net interest margin.
That in part helped the bank post a profit of $8.25 per share in the quarter ended September 30, easily beating analyst's average estimates of $7.69, according to Refinitiv data.
Total revenue fell 12% to $11.98 billion in the quarter.
Goldman's investment banking revenue came in at $1.58 billion, down 57% from last year, reflecting a decrease in M&A and equity and debt underwriting.
After a round of job cuts in September, Solomon said today that Goldman has no such further plans.
"The street certainly seems to view the Goldman reorg to be a positive and well thought out strategy," said Art Hogan, chief market strategist at B. Riley Wealth.
"The firm plans to stitch its banking and trading business into one unit, fuse the wealth operation with its expanded asset-management business and have a smaller standalone business that focuses on embedded finance, effectively offering up Goldman's banking services on corporate partners' platforms," he added.
In the face of aggressive rate increases by the Federal Reserve and the Ukraine war, investors boosted trading activity, helping the bank's fixed income, currency and commodities division.
A jump in interest rates typically translates into higher profitability for banks, which earn on the difference between interest paid on deposits and that collected on loans.
In the consumer and wealth management business, Goldman saw revenue jump 18% to $2.38 billion in the quarter, reflecting higher demand for loans and higher fees from managing assets.
Goldman said its consumer unit will be folded into two separate businesses - wealth management and the newly created platform solutions.
The Platform Solutions unit will include GreenSky, the fintech lender Goldman bought in a $2.2 billion deal.
Trading revenue in the third quarter surged 11% to $6.20 billion, as a 41% jump in fixed income, currency and commodities revenue offset declines from equity trading revenue, which was down 14%.
