Goldman Profit Falls on Mortgage Settlement Costs

Goldman Sachs Group Inc.'s fourth-quarter net income dropped 65% because of the costs to settle a mortgage probe.

Net income declined to $765 million, or $1.27 a share, from $2.17 billion, or $4.38, after an agreement to settle a U.S. probe into the bank's handling of mortgage-backed securities reduced earnings by $1.54 billion, the New York-based company said Wednesday in a statement.

The firm said last week it reached a $5.1 billion agreement in principle on the mortgage case, cutting into its fourth quarter profit and closing out a year of record legal and litigation costs.

Return-on-equity for the full year declined to 7.4% from 11.2% in 2014. It was 3% in the fourth quarter after the cost of the legal settlement, which reduced the figure by 8.1 percentage points.