Goldman Sachs Group Inc. and Lehman Brothers would be hardest-hit on Wall Street if the subprime mortgage slump became a credit crisis like the one that followed Russia's 1998 debt default, according to an analyst at AllianceBernstein Holding LP's Sanford C. Bernstein & Co. LLC.

In the "worst-case scenario," pretax profits at Goldman would tumble 24%, Brad Hintz, an analyst in New York for Sanford C. Bernstein, estimated in a note issued Tuesday.

Pretax earnings at Lehman Brothers, the Wall Street's fourth-largest firm, would drop 20%, he wrote.

Shares of U.S. securities firms, including Goldman, Lehman, Morgan Stanley, Merrill Lynch & Co. Inc., and Bear Stearns Cos., have tumbled in the past two weeks as rising mortgage defaults have threatened to stifle demand for bonds backed by home loans and hurt confidence across the debt market.

Mr. Hintz wrote that the tumble prompted him to consider the possibility of a meltdown like the one that followed Russia's default and the collapse of Long-Term Capital Management in 1998.

"If we experience a crisis similar to the Russian Default/LTCM event in 1998, we can expect Goldman Sachs and Lehman Brothers to experience the largest annual decline in net revenues, net income and return on equity among the large domestic security firms," he wrote. "Morgan Stanley and Merrill Lynch, with their large retail brokerage divisions, will be able to weather the storm much better."

In a broad credit-market decline, Morgan Stanley's pretax profits would drop 12%, and Merrill's would fall 8%, Mr. Hintz wrote.

"But this is a worst-case scenario, and we remain hopeful that the subprime mortgage-backed securities pullback will continue to be constrained to the MBS market and the related collateralized debt obligation market," he wrote. "As long as the MBS pullback continues to be limited solely to the subprime market, the impact on the brokers is manageable."

Lehman and Bear Stearns, the firms most reliant on revenue from mortgage-backed securities, will be most affected if the sell-off is contained in the subprime market, Mr. Hintz wrote.

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