Citi sees quarterly investment banking slide, markets business rise

Individuals stroll beneath a Citibank department brand in the economical district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Picture

June 15 (Reuters) – Citigroup (C.N) world wide head of markets Andy Morton informed an trader conference on Wednesday that he envisioned a drop of as much as 55% in the bank’s expenditure banking company this quarter and an raise of in excess of 25% in its markets business enterprise.

Citi was outperforming the S&P 500’s financial institution index (.SPXBK), up 1% on the day, with the company’s shares previous up 2.6% at $47.14 hunting established for its 2nd straight day of gains immediately after a four-day market-off in which it dropped much more than 12%.

Morton, talking all through the webcast of a Morgan Stanley convention, said a slump in issuance and in mergers and acquisitions (M&A) due to the macro economic and geopolitical condition were being at the rear of the investment decision banking decrease.

“Our belief is that the wallet is down 50%-55% in investment decision banking, and our assessment is that we are heading to come in proper close to that those form of ranges,” Morton mentioned.

But he said Citi’s marketplaces small business was a unique story due to current market volatility across all property which includes commodities and foreign trade, a single of its important segments.

Morton stated his existing estimate was for a 2nd-quarter year-more than-yr earnings enhance “north of 25%” in marketplaces, despite the fact that the govt said volatility also meant the circumstance could adjust promptly.

“Just supplied the volatility, you know, even in two weeks, when you might be owning moves like we’re getting in the very last number of days or so, that amount could obviously fluctuate,” he reported, incorporating corporate activity was up about a third for the second quarter.

Considering the fact that Citi’s mounted income marketplaces enterprise was considerably bigger than its equity company, the govt explained Citi was looking for “reduced hanging fruit” to broaden in equities, including looking for to safe equities business enterprise from its fixed income clients.

Reporting by Noor Zainab Hussain and Sinéad Carew Modifying by Edmund Blair

Our Standards: The Thomson Reuters Believe in Principles.