US bank profits rise in second quarter despite trading hits from China and Greece

Large US banks reported mostly higher second-quarter earnings last week even as a pullback in trading revenues due to crises in Greece and China dented results.

The biggest hit came at Goldman Sachs, where revenues in bond, foreign exchange and commodities trading fell 28 per cent.

"Obviously Greece has been in the headlines continuously and that certainly weighed on spread-sensitive parts of the business like credit and mortgages," Goldman chief financial officer Harvey Schwartz said. "And so it's not surprising that we saw reduced client activity in the quarter."

Schwartz said volatility in the Chinese stock market since the middle of last month also had rattled investors.

JP Morgan Chase, the biggest US bank by assets, cited Greece as a key factor in a 10 per cent decline in bond, foreign exchange and currency trading. Bank of America saw a 9 per cent drop in this category, while Citigroup's fell 1 per cent.

"The quarter was dominated by EMEA (Europe, the Middle East and Africa) with a bond sell-off and economic and political uncertainty, including Greece," JP Morgan chief financial officer Marianne Lake said. "This uncertainty slowed the momentum we saw in the first quarter."