The company said on Thursday that net income for the three months to late May came in at $563m, 2% down on the same period last year.

Net sales were down 3% on the year at $3.85bn.

The decline reflects a dearth of lucrative new share issues, with many companies deterred from going public by recent stock market turmoil.

The company said it did not foresee an imminent upturn in new business.

"We continue to see weak investor and CEO confidence, which continues to reduce corporate activity and suppress the equity markets," Goldman chief financial officer David Viniar said.

Confidence

However, the company managed to outperform most of its rivals, buoyed by a 33% increase in revenues from advising on mergers and acquisitions.

Goldman's profits, though down on the year, were still ahead of most analysts' forecasts.

And in a further sign of confidence, the company said it was not planning any major job cuts, in contrast to some other investment banks.

US brokerages have shed an estimated 41,000 jobs since February last year, according to US industry figures.

Analysts said the company's staffing intentions suggested that it believes there may be a recovery before the end of the year.

"Goldman expects short-term sluggishness, with a good chance of accelerating growth in the fourth quarter," said David Trone at Prudential.

"Management's intention to keep staffing levels flat from here signals their conviction."

Goldman Sachs shares were $1.28 lower at $73.17 in New York shortly after its results were published.