Goldman Sachs Q2 earnings dive

Large legal costs and weak bond trading due in part to the Greek debt crisis hammered Goldman Sachs's second-quarter earnings, according to the bank's results released Thursday.

Net earnings in the quarter ending June 30 fell by almost half, to $1.05 billion from $2.04 billion in the year-ago period. Revenues slipped 0.6 percent to $9.07 billion.

The biggest factor in the drop was $1.45 billion in legal costs, largely due to mortgage-related litigation.

The other big weak area was a 28 percent fall in trading revenues for fixed income, currency and commodities to $1.6 billion.

Goldman Sachs chief financial officer Harvey Schwartz said some clients pulled back from markets on fears of a messy Greek exit from the eurozone.

"With all the issues in Greece, liquidity was quite challenging for all of our clients and also for market makers," Schwartz said in an investor conference call.

"The news on Greece has been very positive the last couple of days, so hopefully some of these trends are behind us."

The weak results in bond trading were partially offset by a big rise in equity trading revenues. Another strong point was financial advisory services amid strong merger and acquisition activity.

Schwartz said advising activity on mergers is "quite robust" and has not been crimped by Greece. Schwartz said Chinese equity markets remained "pretty fluid" following a volatile ride that has seen the Shanghai stock index fall more than 25 percent since June 12.

The investment bank remains confident in long-term growth in the world's second-biggest economy.