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UPDATE 1-Goldman Sachs profit beats expectations on equity trading, lending

(Adds details on trading, lending)

July 16 (Reuters) - Goldman Sachs Group Inc reported a better-than-expected quarterly profit on Tuesday as the Wall Street investment bank benefited from higher equity trading and an increase in lending to its wealthy clients and companies.

The bank, like its rivals, is facing several challenges in growing its revenue in the face of rising geopolitical uncertainties and concerns about the impact of future interest rate cuts by the U.S. Federal Reserve.

Goldman is also shifting its business model away from a focus on trading to a more stable, consumer-focused revenue stream.

Revenue fell at three of its four major businesses, with the biggest declines in trading and investment management.

Institutional client revenue, which includes trading, slipped 3%, while investment banking revenue was down 9%. However, revenue from the bank's investing and lending business rose 16%.

"Given the strength of our client franchise, we are well positioned to benefit from a growing global economy," Chief Executive Officer David Solomon said in a statement.

While revenue slipped in the quarter, lower compensation expenses provided some relief. Total operating expenses were nearly flat at $6.12 billion.

The bank is aiming to generate $5 billion in new revenue by 2020, and is currently undergoing a front-to-back review of all its businesses started last October when Solomon took control as CEO.

While the final strategy is not expected until early next year, the bank has already made moves to expand its consumer division, by growing online bank Marcus and launching a credit card with Apple Inc. It also announced plans in May to acquire United Capital, a boutique wealth management firm.

The bank's net earnings applicable to common shareholders fell 6% to $2.20 billion in the quarter ended June 30. Earnings per share fell to $5.81 from $5.98 a year earlier.

Total net revenue fell 2% to $9.46 billion. (http://bit.ly/2lwdUOM)

Analysts had expected earnings of $4.89 per share and revenue of $8.83 billion, according to IBES estimate from Refinitiv.

Goldman's main rival Morgan Stanley is expected to report quarterly results later in the week. (Reporting by Sweta Singh in Bengaluru Editing by Saumyadeb Chakrabarty)