The Goldman Sachs Group Inc. (NYSE: GS) today reported net revenues of
$6.63 billion and net earnings of $962 million for the second quarter
ended June 30, 2012.
Diluted earnings per common share were $1.78 compared with $1.85 for the second quarter of 2011 and $3.92 for the first quarter of 2012. Annualized return on average common shareholders' equity (ROE) was 5.4% for the second quarter of 2012 and 8.8% for the first half of 2012.
Goldman Sachs continued its leadership in investment banking, ranking first in worldwide announced and completed mergers and acquisitions for the year-to-date, according to a company release.
Book value per common share and tangible book value per common share both increased approximately 2% during the quarter to $137.00 and $126.12, respectively.
The firm continues to manage its liquidity and capital conservatively. The firm's global core excess liquidity was $175billion as of June 30, 2012. In addition, the firm's Tier 1 capital ratio under Basel 1 was 15.0% and the firm's Tier1 common ratio under Basel1 was 13.1% as of June 30, 2012.
"During the second quarter, market conditions deteriorated and activity levels for both corporate and investing clients were lower given continued instability in Europe and concerns about global growth," said Lloyd C. Blankfein, chairman and CEO. "Still, we remain focused on meeting our clients' needs, while prudently managing our capital, liquidity and risk."
Net revenues in Investment Banking were $1.20 billion, 17% lower than the second quarter of 2011 and 4% higher than the first quarter of 2012. Net revenues in Financial Advisory were $469million, 26% lower than the second quarter of 2011, reflecting a decline in industry-wide completed mergers and acquisitions. Net revenues in the firm's underwriting business were $734 million, 9% lower than the second quarter of 2011. Net revenues in equity underwriting were significantly lower compared with the second quarter of 2011, principally due to a decline in industry-wide activity. Net revenues in debt underwriting were higher compared with the second quarter of 2011, reflecting higher net revenues from investment-grade and commercial mortgage-related activity, partially offset by lower net revenues from leveraged finance activity. The firm's investment banking transaction backlog increased compared with the end of the first quarter of 2012.
Institutional Client Services
Net revenues in Institutional Client Services were $3.89 billion, 11% higher than the second quarter of 2011 and 32% lower than the first quarter of 2012.
Net revenues in Fixed Income, Currency and Commodities Client Execution were $2.19 billion, 37% higher than the second quarter of 2011, reflecting higher net revenues in mortgages and commodities compared with difficult market-making conditions during the second quarter of 2011. During the second quarter of 2012, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment reflecting broad market concerns and uncertainty, which resulted in generally wider credit spreads and lower activity levels compared with the first quarter of 2012.
Net revenues in Equities were $1.70 billion, 12% lower than the second quarter of 2011, primarily due to lower net revenues in equities client
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