Goldman Sachs Group, Inc. reported lower net revenues and profits for its second quarter, as market weakness hampered results in most of its major business lines.

The firm said diluted earnings per common share were 78¢ compared with US$4.93 for the second quarter of 2009 and US$5.59 for the first quarter of 2010. Earnings per share were hit by the firm’s recent settlement with the U.S. Securities and Exchange Commission and the UK’s tax on banker bonuses. Excluding the impact of the US$600 million related to the UK bank payroll tax and the US$550 million related to the SEC settlement, diluted earnings per common share were US$2.75.

Overall second quarter net revenues reached US$8.84 billion and net earnings were US$613 million. Net revenues in trading and principal investments were US$6.55 billion, 39% lower than the second quarter of 2009 and 36% lower than the first quarter of 2010. Net revenues in the investment banking division were 36% lower than the second quarter of 2009 and 23% lower than the first quarter of 2010. Financial advisory revenues were up 28% from the second quarter last year, primarily reflecting an increase in client activity. Revenues in asset management and securities services were 11% lower than the second quarter of 2009, but 2% higher than the first quarter of 2010.

“The market environment became more difficult during the second quarter and, as a result, client activity across our businesses declined,” said Lloyd Blankfein, chairman and CEO of Goldman. “Looking ahead, we remain focused on helping our clients to raise capital, manage risk and invest for the future, which are all important to economic growth.”

IE