Good morning, and my name is Dennis, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs' Second Quarter 2017 Earnings Conference Call. This call is being recorded today, July 18, 2017. Thank you.
Mr. Holmes, you may begin your conference.
Good morning. This is Dane Holmes, Head of Investor Relations at Goldman Sachs, and welcome to our second quarter earnings conference call. Today's call may include forward-looking statements. These statements represent the firm's belief regarding future events that, by their nature, are uncertain and outside of the firm's control. The firm's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the firm's results, please see the description of risk factors on our current annual report on Form 10-K for the year ended December 2016.
I would also direct you to read the forward-looking disclaimers in our quarterly earnings release, particularly as it relates to our investment banking transaction backlog, capital ratios, risk-weighted assets, global core liquid assets and supplementary leverage ratio. And you should also read the information on the calculation of non-GAAP financial measures that's posted on the Investor Relations portion of our website at www.gs.com. This audiocast is copyrighted material of The Goldman Sachs Group, Inc. and may not be duplicated, reproduced or rebroadcast without our consent.
Our Chief Financial Officer, Marty Chavez, will now review the firm's results. Marty?
Thanks, Dane, and thanks to everyone for dialing in. I'll walk you through the second quarter and first half results, then I'll be happy to answer any question.
In the second quarter, we produced net revenues of $7.9 billion, net earnings of $1.8 billion, earnings per diluted share of $3.95 and an annualized return on common equity of 8.7%. Taking a step back to review our year-to-date results, we had firmwide net revenues of $15.9 billion, net earnings of $4.1 billion, earnings per diluted share of $9.10 and a return on common equity of 10.1%. As you can see, the first 6 months of 2017 reflected improved performance. We were able to achieve this despite what continues to be a challenging operating environment in certain businesses.
Our revenues were up more than $1.6 billion or 12% compared with the first half of last year. Meanwhile, expenses were up only 6%, demonstrating the positive operating leverage that is embedded within our operations. Despite a difficult backdrop for our FICC business, the firm grew pretax margin by 340 basis points versus last year, and our ROE increased 260 basis points. The improvement stems from having a diversified set of leading global businesses. Weakness in FICC, particularly in commodities, was offset with results in Investing & Lending, Investment Management and Underwriting.
As all of you are aware, many of the themes that we discussed during the first quarter continued into the second: Rising market values and low volatility. On one hand, rising
Head of IR
Gerard S. Cassidy
Jeffery J. Harte
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