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Goldman Sachs, Pulling Back From Consumer Lending, Reports 33% Decline in Profit

Goldman Sachs reported lower profit for the third quarter, hurt by losses from selling off pieces of its consumer-lending business and a big drop in revenue in its asset and wealth-management division.

The bank on Tuesday said quarterly profit was $2.1 billion, down 33% from a year ago. That amounted to $5.47 per share, which beat the $5.42 per share expected by analysts polled by FactSet.

Revenue was $11.8 billion, down 1% from a year ago. That still beat the $11.2 billion expected by analysts.

The quarter’s earnings reflect the continuing financial hit that Goldman is experiencing as it narrows its ambitions—namely, pulling back from its once-trumpeted consumer-lending efforts. It announced last week the sale of specialty lender GreenSky, and it has offloaded substantially all of its personal loans balances.

Goldman is pinning much of its hopes for diversifying its revenue on its asset and wealth-management business. The unit’s revenue dropped 20%, partly because of one-time write-downs.

Goldman took several charges that resulted in a nearly $1 billion hit to pretax profits. Write-downs on older investments in the asset and wealth-management unit amounted to $728 million, while GreenSky cost another $203 million. Overall, the charges reduced the quarter’s annualized return on equity by 3.1 percentage points to 7.1%.

Revenue from investment banking and trading, Goldman’s traditional powerhouses, was little changed from a year ago.

This marks the eighth quarter in a row where Goldman reported a year-over-year profit decline.

Rivals such as JPMorgan Chase and Wells Fargo, meanwhile, have been turning in blockbuster earnings all year, fueled by big units that lend to households and commercial businesses. JPMorgan reported a 35% jump in third-quarter net income last week, and Wells Fargo posted a 61% increase. Bank of America, which reported on Tuesday, said its profit rose 10%.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Charley Grant at charles.grant@wsj.com