Tags: Citigroup | markets | earnings | revenue

Citigroup Says Markets Revenue to Drop 15 Percent in First Quarter

Tuesday, 08 Mar 2016 02:25 PM

Citigroup Inc.’s revenue from trading in equity and fixed-income markets will drop 15 percent in the first quarter from a year earlier, according to Chief Financial Officer John Gerspach. The shares fell.

In fixed income, spread products continue to be pressured, while interest rates and currencies are hampered by a tough comparison to last year, Gerspach said Tuesday during an investor presentation by the New York-based bank. Investment- banking revenue will tumble 25 percent in the period, he said.

Shares of the firm slid 3.2 percent to $41.24 at 1:18 p.m. in New York, the third-worst performance in the 24-company KBW Bank Index.

Citigroup joins JPMorgan Chase & Co. in warning about a tough first quarter for Wall Street as low interest rates, plunging commodity prices and volatile stock markets drive customers to the sidelines. JPMorgan, the largest global investment bank, said last month that revenue from sales and trading has tumbled about 20 percent this year. Daniel Pinto, who runs that firm’s Wall Street operations, said lower earnings from debt and equity underwriting may contribute to a 25 percent decline in the division’s fee revenue.

Citigroup will set aside $400 million to cover restructuring costs as the firm continues to adjust its infrastructure and capacity to the sluggish revenue environment, Gerspach said. The bank planned to begin job cuts earlier this year that would affect at least 2,000 employees, a person briefed on the decision said in December.

The cost of credit for the corporate bank will be about $350 million in the first quarter, with most of that tied to energy, Gerspach said. Reserves on funded loans to the sector will be about 4.5 percent, with the level for junk-rated firms amounting to more than 10 percent, he said.

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Citigroup Inc.'s revenue from trading in equity and fixed-income markets will drop 15 percent in the first quarter from a year earlier, according to Chief Financial Officer John Gerspach.
Citigroup, markets, earnings, revenue
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2016-25-08
Tuesday, 08 Mar 2016 02:25 PM
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