Citi sees quarterly investment banking slide, markets business rise

Persons stroll beneath a Citibank department symbol in the monetary district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Photo

June 15 (Reuters) – Citigroup (C.N) international head of marketplaces Andy Morton instructed an trader conference on Wednesday that he expected a drop of as a great deal as 55% in the bank’s financial investment banking enterprise this quarter and an increase of over 25% in its marketplaces enterprise.

Citi was outperforming the S&P 500’s lender index (.SPXBK), up 1% on the day, with the company’s shares last up 2.6% at $47.14 hunting set for its second straight working day of gains immediately after a four-working day provide-off in which it dropped additional than 12%.

Morton, speaking all through the webcast of a Morgan Stanley conference, mentioned a slump in issuance and in mergers and acquisitions (M&A) because of to the macro economic and geopolitical predicament have been driving the expenditure banking decline.

“Our perception is that the wallet is down 50%-55% in financial commitment banking, and our evaluation is that we are going to arrive in suitable around that these variety of levels,” Morton claimed.

But he said Citi’s marketplaces organization was a diverse story due to market place volatility across all belongings which includes commodities and foreign trade, just one of its important segments.

Morton reported his recent estimate was for a 2nd-quarter year-in excess of-yr income enhance “north of 25%” in markets, although the govt stated volatility also meant the circumstance could transform swiftly.

“Just given the volatility, you know, even in two months, when you might be getting moves like we’re having in the final couple times or so, that quantity could definitely fluctuate,” he claimed, introducing corporate activity was up about a third for the second quarter.

Due to the fact Citi’s mounted profits marketplaces company was considerably greater than its equity business enterprise, the executive explained Citi was seeking for “small hanging fruit” to grow in equities, including looking for to protected equities enterprise from its preset cash flow clients.

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

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