Investment banking revenue also dropped as equity underwriting and merger advisory activity slowed.
The results show the pressure investment banks face as trading volume drops globally and merger activity slows. Goldman cut 100 jobs during the second quarter and trimmed other costs, including compensation and professional fees.
Its investing and lending division suffered $194m of losses on its investment in shares of Industrial and Commercial Bank of China, and $112m of losses from other stocks.
Goldman’s earnings per share still easily beat analyst expectations, in part because it spent $1.5bn buying back 14.3 million of its shares during the quarter.
The bank earned $927m, or $1.78 per share, down 12 per cent from $1.052bn, or $1.85 per share, a year earlier.
Analysts’ average forecast was $1.16 per share, according to Thomson Reuters.
“I think a lot of the cost-cutting measures are starting to pay off to the bottom line,” said Edward Deicke, a registered representative at JHS Capital Advisors.
Goldman’s operating expenses fell 8 per cent to $5.2bn. But revenue fell a sharper 9 per cent to $6.6bn.
Overall, its lending and investing division reported an 81 per cent decline in net revenue, to $203m from more than $1bn a year earlier.