UPDATE 1-Wall Street earned $10.5 bln in 1st half-NY comptroller

(Adds details on bonuses, salaries)

Oct 9 (Reuters) - New York City's securities industry earned $10.5 billion in the first half of 2012, down from the first half of 2011, though it is on pace to end the year with $15 billion of profits, barring adverse developments, a report by the state comptroller said on T ues day.

New York State Comptroller Thomas DiNapoli said the industry earned $12.6 billion in the first half of 2011.

Europe's sovereign debt crisis caused banks and brokerages to lose $4.9 billion in the second half of 2011, and the industry ended the year with only $7.7 billion of profits, the report said.

Securities-linked activities accounted for 14 percent of the state's tax revenue in fiscal 2011, down from 20 percent in 2008.

Wall Street is the bedrock of the city and state economies, and the industry's struggles since the financial crisis have hurt tax revenues and spawned deficits.

For New York City, the decline in tax revenue was a bit less severe, falling to 7 percent from 12 percent. The state depends more on business and personal income taxes.

The comptroller said cash bonuses paid to securities industry workers who live in New York City likely will fall in 2012 for the second year in a row, dipping below his earlier $19.7 billion estimate for 2011. That was down 13.5 percent from 2010.

"The securities industry remains in transition and volatility in profits and employment show that we have not yet reached the new normal," DiNapoli said.

The average salary for a securities industry worker rose 0.5 percent to $362,950 in 2011. That remains below the approximately $400,000 average in 2007.

Wall Street employed about 168,700 people in August, but DiNapoli said there has been a sharp decline in recent months and the contractions likely will continue for the rest of 2012.

DiNapoli stressed the economic impact of the securities industry on New York City. Last year, New York Stock Exchange member firms paid 23.2 percent of all the wages earned by private sector employees in the city, although Wall Street accounts for only 5.3 percent of the private sector's jobs.

Each new person hired by the securities industry creates two more jobs in other industries in New York City - and another job in the rest of the state, mainly in the suburbs, DiNapoli said. The additional jobs cover a wide range of professions, from florists to lawyers, economists say.

(Reporting by Joan Gralla; Editing by Dan Grebler)