Banking titan Goldman Sachs on Wednesday reported a steep drop in profits for 2011, a fall of 47 percent from the prior year as the firm battled global economic headwinds.

The New York-based bank, once famously described as a "great vampire squid" for its ability to make money, made $4.4 billion dollars last year before dividend payments, much less than the $8.4 billion profit seen in 2010.

"This past year was dominated by global macroeconomic concerns which significantly affected our clients' risk tolerance and willingness to transact," said chief executive Lloyd Blankfein.

Revenues were significantly down at Goldman's investment banking, fixed income, currency and commodity units.

The company lost $517 million in one investment: shares ofIndustrial and Commercial Bank of China Limited (ICBC).

Goldman said fourth-quarter net earnings were $1.01 billion, down 58 percent from the same period in 2010.

Over the course of the year Goldman spent over $12 billion on salaries and other benefits, down 21 percent from the prior year.

It also spent nearly $2 billion on a dividend payment for shareholders.

But there was a beacon of hope for a return to bumper profits.

"As economies and markets improve -- and we see encouraging signs of this -- Goldman Sachs is very well positioned to perform for our clients and our shareholders," Blankfein said.