Citigroup CEO Sees Profit Little Changed From First Quarter

  • Corbat sees trading, investment-banking revenue ‘up slightly’
  • Bank’s shares declined in late trading following his remarks

Citigroup Inc.’s second-quarter net income probably will be unchanged from the previous three-month period, Chief Executive Officer Michael Corbat said.

Trading and investment-banking revenue for the period should be “up slightly” compared with the first quarter, Corbat, 56, said Thursday at an investor conference in New York.

If second-quarter net income under generally accepted accounting principles remains flat with the prior three months at $3.5 billion, that will be a drop of about 28 percent from the same period in 2015. Trading revenue in last year’s second quarter was about $3.7 billion, compared with about $3.8 billion in the first quarter of 2016. Investment banking revenue was $875 million in the first three months of the year and $1.29 billion in the second quarter of 2015.

Citigroup shares, which closed up 3 cents in regular trading Thursday in New York, dropped 0.8 percent to $46.61 at 6:18 p.m. after Corbat’s remarks.

Wall Street banks have been chopping costs and cutting jobs in debt-trading operations as stricter regulations and persistently low interest rates have strangled revenue. The world’s biggest investment banks generated $70 billion in fixed-income revenue last year, half the 2009 peak, according to Coalition Development Ltd.

BofA Trading

Bank of America Corp.’s second-quarter trading revenue is on track to rise by “mid-single digits” from a year earlier, Chief Executive Officer Brian Moynihan said Thursday at the same conference, following optimistic comments a day earlier from JPMorgan Chase & Co.

“We feel good about it,” said Moynihan, 56. Trading in April and May was “consistent with what you’re hearing out there. We feel that for the quarter, we might be mid-single digits up over the last year.”

JPMorgan’s Daniel Pinto, who runs that firm’s investment bank, said Wednesday that trading revenue is poised to increase by a “mid-teens" percentage in the second quarter from a year earlier. A rebound in businesses including rates trading and some emerging markets are driving the improvement, he said.

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