Three of Wall Street's top firms - Goldman Sachs, Lehman Brothers and Bear Stearns - fell victim to an investment banking slump and reported sharp quarterly profit declines yesterday.

Investment banking fees, which are driven by selling stocks and bonds and advising on mergers, dried up against the backdrop of a US recession and the September 11th attacks.

Goldman profits fell 17 per cent, but Lehman sustained the biggest profit dive as earnings fell 50 per cent from a year ago.

Lehman, which is moving to midtown Manhattan in the wake of September 11th, took a $127 million (€141 million) charge to pay for being displaced from its World Financial Center headquarters.

Bear Stearns posted a 21 per cent profit decline.