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Goldman profit halves on weak bond trading, legal provisions

[NEW YORK] Goldman Sachs Group Inc's profit more than halved in the second quarter as trading revenue weakened and litigation provisions soared.

The Wall Street bank said on Thursday its net income applicable to common shareholders fell to US$916 million, or US$1.98 per share, in the three months to June 30, from US$1.95 billion, or US$4.10 per share, a year earlier.

Goldman recorded US$1.45 billion in net provisions for mortgage-related litigation and regulatory matters, up from US$284 million a year earlier, reducing earnings by $2.77 per share.

Analysts on average had expected earnings of US$3.89 per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.

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Goldman, whose shares were down 1 per cent in premarket trading, said its net revenue from fixed-income, currency and commodity trading fell 28 per cent to US$1.60 billion.

"While uncertainty in the EU weighed on investors' level of conviction, many of our businesses continued to benefit from generally improving economic conditions," Chief Executive Lloyd Blankfein said in a statement.

Revenue from equity underwriting rose 9 per cent to US$595 million, while investment banking revenue overall, which includes M&A, debt underwriting and stock underwriting, rose 13 per cent to US$2.02 billion.

Goldman ranked No 1 in global mergers and acquisitions as well as in equity underwriting in the first half of 2015, according to Thomson Reuters data.