Citi sees quarterly investment banking slide, markets business rise

Individuals wander beneath a Citibank department brand in the economic district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Photo

June 15 (Reuters) – Citigroup (C.N) world wide head of marketplaces Andy Morton explained to an trader conference on Wednesday that he expected a decline of as a lot as 55% in the bank’s investment decision banking enterprise this quarter and an boost of around 25% in its markets business enterprise.

Citi was outperforming the S&P 500’s lender index (.SPXBK), up 1% on the working day, with the firm’s shares last up 2.6% at $47.14 wanting set for its 2nd straight working day of gains following a 4-day promote-off in which it dropped much more than 12%.

Morton, talking all through the webcast of a Morgan Stanley convention, explained a slump in issuance and in mergers and acquisitions (M&A) thanks to the macro economic and geopolitical scenario were driving the investment banking decline.

“Our belief is that the wallet is down 50%-55% in financial investment banking, and our assessment is that we’re going to come in right all around that all those form of ranges,” Morton stated.

But he said Citi’s markets business enterprise was a different story owing to marketplace volatility throughout all belongings such as commodities and foreign trade, one of its key segments.

Morton mentioned his latest estimate was for a second-quarter yr-over-calendar year earnings enhance “north of 25%” in marketplaces, even though the government said volatility also meant the circumstance could improve speedily.

“Just offered the volatility, you know, even in two weeks, when you happen to be owning moves like we’re obtaining in the previous few days or so, that number could naturally fluctuate,” he stated, introducing company exercise was up about a third for the 2nd quarter.

Since Citi’s mounted earnings markets small business was considerably more substantial than its fairness enterprise, the govt mentioned Citi was looking for “very low hanging fruit” to develop in equities, which include trying to get to secure equities business enterprise from its preset revenue customers.

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

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