Goldman Sachs 2Q income $1.05 billion

Goldman Sachs Group (GS) nearly doubled second-quarter income despite lower overall revenue, as gains in investment banking and debt underwriting offset a slowdown in institutional client services. The investment banking giant said earnings for the three months ended June 30 rose to $1.05 billion, or $1.85 a share, from $453 million, or 78 cents a share, a year ago. Revenue for the quarter decreased 18% to $7.28 billion from $8.84 billion. Institutional client services revenue fell 45% from the first quarter to $3.52 billion and was 29% lower than a year earlier. “High levels of uncertainty and decreased levels of liquidity during the quarter contributed to difficult market-making conditions, particularly in mortgages and commodities, and prompted the firm to operate at generally lower levels of risk,” Goldman Sachs said. Investment banking revenue rose 54% from a year ago to $1.45 billion and is up 14% from the first three months of 2011. Underwriting revenue for the second quarter increased 73% from a year ago to $811 million “reflecting an increase in leveraged finance activity.” “During the second quarter, the operating environment was more difficult given global macroeconomic concerns,” Chairman and CEO Lloyd Blankfein said. “In addition, certain of our businesses had disappointing results as we reduced our market risk in response to attempting to manage fluctuations in prices and market liquidity.” Goldman ended the second quarter with a Tier 1 capital ratio of 14.7% under Basel I with a Tier 1 common ratio of 12.9%. Both ratios are essentially unchanged from March 31. The company reported total assets under management of $844 billion as of June 30, up slightly from the end of the first quarter and 5% higher than $802 billion a year ago. Write to Jason Philyaw. Follow him on Twitter @jrphilyaw.