*

Trading, dealmaking lift profit

*

Financing revenue hits record

*

Headcount down 2% sequentially

*

Advisory drives IB fees backlog higher

*

Asset and wealth revenue dips 3%

*

(Updates shares in paragraph 19)

By Saeed Azhar and Niket Nishant

July 16 (Reuters) - Goldman Sachs' ( GS ) second-quarter

profit exceeded Wall Street expectations, as turbulent markets

lifted revenue from its equities division to a record and a

pickup in dealmaking boosted investment banking.

The results capture a growing trend of market turmoil

boosting trading desks across Wall Street as investors rebalance

their portfolios to manage tariff-related risks.

Goldman's equities revenue rose 36% to $4.3 billion, higher

than the $3.6 billion analysts were expecting, according to

estimates compiled by LSEG.

Fixed income, currencies and commodities business hauled in

$3.47 billion, 9% higher than a year ago. Financing revenue in

both equities and FICC hit a record.

While shifting tariff risks kept some companies on the

sidelines, pent-up demand for dealmaking triggered a flurry of

acquisitions.

Still, the return of trade policy uncertainty in recent

weeks has revived concerns about how long the momentum would

last.

"The economy and markets are generally responding positively

to the evolving policy environment. But as developments rarely

unfold in a straight line, we remain very focused on risk

management," Goldman CEO David Solomon said in a statement.

Goldman's investment banking fees stood at $2.19 billion,

rising 26% from a year ago. Analysts were expecting a nearly 10%

jump.

"The well-above consensus rise in investment banking was (a

surprise), with a lot of analysts snookered into thinking that

macro uncertainty would hold back this line item more than it

did," said Stephen Biggar, director of financial services

research at Argus Research.

Advisory fees were significantly higher due to strength in

the Americas and Europe, the Middle East and Africa, the bank

said.

Revenue from debt underwriting fell slightly, while equities

underwriting was unchanged.

Overall profit rose 22% to $3.7 billion, or $10.91 per

share, for the three months ended June 30,exceeding estimate of

$9.53.

Goldman's rivals JPMorgan Chase ( JPM ) and Citigroup ( C/PN )

too had reported strong trading gains on Tuesday.

ASSET AND WEALTH REVENUE FALLS

Revenue from Goldman's asset and wealth management arm,

which caters to institutions and high net-worth individuals,

dipped 3% to $3.78 billion due to weakness in equity and debt

investments.

The business is important for Goldman as it can offer

steadier revenue than trading and investment banking.

The bank set aside $384 million as provisions for credit

losses, compared with $282 million last year, mainly related to

its credit card portfolio.

Headcount fell to 45,900, 2% lower than the first quarter.

The bank had planned to trim its staffing by 3% to 5% in an

annual performance review process.

Shares rose 0.9% before the market open. They have climbed

23% this year, making them the fifth best performer in the S&P

500 financial index.

The stock boost has partly been driven by shareholder

confidence in recent weeks after the bank cleared the Federal

Reserve's annual stress test, paving the way for it to increase

its dividend by $1 a share from the third quarter.