NEW YORK (MarketWatch) — The securities industry in New York City faces likely job cuts of nearly 10,000 through 2012 as Wall Street banks cope with lower trading revenue, new regulations restricting their activities, and bruised stock prices, according to a new report.

State Comptroller Thomas DiNapoli also said in the report that industry bonuses are likely to shrink this year.

“It now seems that profits will decline sharply from last year’s level, job losses will grow, and cash bonuses will be smaller,” DiNapoli said in his yearly report that makes predictions on the state of Wall Street.

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If the estimates are correct, the losses through 2012 would more than give back all the 9,900 jobs that the industry added in the city between January 2010 and April 2011.

“Since April 2011, the securities industry in New York City has lost 4,100 jobs. The Office of the State Comptroller forecasts that the city could lose nearly 10,000 additional jobs by the end of 2012, which would bring total job losses in the securities industry to 32,000 since January 2008,” the report said.

This would put Wall Street employment down 17% since the advent of the 2008 financial crisis, which would still be less than the roughly 20% job cuts recorded during the early 1990s and early in the last decade, according to DiNapoli’s report.

It’s a nervous time to work in financial services: Bank of America Corp. BAC, +1.34% plans to cut 30,000 jobs over the next few years, while UBS AG UBS, +1.27% intends to shave 3,500 jobs and Goldman Sachs Group GS, +2.12% expects to eliminate 1,000 jobs.

Wall Street has long been a key component of the Big Apple’s economy. One in eight jobs is tied to the securities industry in New York City, with securities-related activities making up 14% of the city’s tax revenues.

Jobs get cut when earnings fall, and according to the report, the securities industry’s profits fell by 10.8% in the first half of 2011, to $12.6 billion.

DiNapoli’s office forecasts a “large decline in profitability,” saying earnings are unlikely to reach $18 billion for the entire year — one-third less than in 2010.

The falloff in profits reflected a “sharp” drop pegged at 18.1% in net revenue, largely the result of lower revenue from proprietary trading, as well as a 3.1% increase in noninterest expenses, the report said.

The comptroller’s report comes as major players in financial services preare to begin turning in their latest quarterly financial results.

J.P. Morgan Chase & Co. JPM, +0.96% reports third-quarter earnings Thursday.

The Manhattan-based bank is expected to show profit fell 7% to 94 cents a share as well as revenue of $23.5 billion, which would be down 1% from the year-ago quarter, according to the latest FactSet Research survey of analysts’ forecasts.

Goldman Sachs is scheduled to report results Oct. 18.

Analysts forecast Goldman will record a meager three-month profit of 13 cents a share, down 96% from the $2.98 a share it earned in the same 2010 period. Quarterly revenue is estimated to drop 40% to $5.3 billion.

Citigroup Inc. C, +1.62% delivers earnings Oct. 17, with analysts targeting a profit of 88 cents a share, up 25% from the year-earlier quarter. Revenue is projected to slip 7% to $19.3 billion, the FactSet-compiled consensus shows.

Compensation at Wall Street firms grew 18.7% to $37.2 billion during the first six months of 2011, compared to the same 2010 period, but DiNapoli expects compensation to shrink by year’s end as firms cut jobs and set aside less bonus-pool money due to profit pressures.

This year, the securities industry increased base salaries in response to regulatory changes that frowned on large cash bonuses.