Tumbling revenue from stock trading dragged down global investment banks’ earnings below year-ago levels in the first six months of 2012, a report showed on Thursday, underlining how equities divisions are likely destined for big cutbacks.

A big fall in dealmaking also hurt revenues, which dropped more than 7 percent to $86 billion across the world’s top 10 investment banks even as profit engines such as bond trading recovered, according to a study by analytics group Coalition.

Cash equities was a particularly weak spot in the first half, as lower trading volumes and the rise of electronic trading bit into revenues, which fell roughly 30 percent from year-ago levels. 

The poor performance of equities units so far this year has made them among the most vulnerable areas for cutbacks, as banks prepare to slash more jobs in September and October to control costs ahead of the year end.

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