Goldman Sachs’ Goodwill Writedown Signals Tough Choices Ahead

Goldman Sachs Group Inc.'s half-billion-dollar goodwill impairment was largely tied to the soured acquisition of a home improvement loan originator. Wider turmoil in the banking industry, however, hints it may not be the last big writeoff this quarter.

The collapse of three US banks this spring, persistently high interest rates, and poor bank stock price returns means any bank that bought or merged with another bank in recent years needs to seriously assess the value of goodwill—a non-cash asset linked to mergers or acquisitions—sitting on its balance sheet.

“What we’re seeing in the market with stock prices—we’re there,” said Sydney ...