The Goldman Sachs Group, Inc. today reported much lower earnings for its third quarter ended August 29. Profits were down about 70% on weakness in trading and investment banking.

The firm reported net revenues of US$6.04 billion and net earnings of US$845 million for the quarter. Diluted earnings per common share were US$1.81 compared with US$6.13 for the third quarter of 2007 and US$4.58 for the second quarter of 2008. Annualized return on average tangible common shareholders’ equity was 8.8% for the quarter.

Net revenues in investment banking were US$1.29 billion, 40% lower than the third quarter of 2007. The financial advisory segment was the weak spot where net revenues were US$619 million, down 56%, primarily reflecting a decrease in industry-wide completed mergers and acquisitions.

The trading and principal investments division reported net revenues of US$2.7 billion, 67% lower than the third quarter of 2007.

Only the asset management and securities services business managed to increase net revenues. They were up to US$2.05 billion, 4% higher than the third quarter of 2007, although they were down 5% from the prior quarter.

“This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations,” said Lloyd Blankfein, chairman and CEO, in a release. “Despite the deteriorating market conditions, the focus of our people and strength and breadth of our client franchise produced a solid performance in a tough environment. We remain well-positioned to meet the needs of our clients and identify and act on the right market opportunities.”

IE