Citi sees quarterly investment banking slide, markets business rise

People today stroll beneath a Citibank department symbol in the financial district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Photograph

June 15 (Reuters) – Citigroup (C.N) world head of markets Andy Morton explained to an trader meeting on Wednesday that he envisioned a drop of as a lot as 55% in the bank’s expenditure banking organization this quarter and an boost of in excess of 25% in its marketplaces business.

Citi was outperforming the S&P 500’s lender index (.SPXBK), up 1% on the day, with the firm’s shares final up 2.6% at $47.14 looking set for its next straight day of gains right after a four-working day offer-off in which it dropped additional than 12%.

Morton, talking in the course of the webcast of a Morgan Stanley convention, mentioned a slump in issuance and in mergers and acquisitions (M&A) due to the macro economic and geopolitical situation were being driving the expense banking decrease.

“Our belief is that the wallet is down 50%-55% in expenditure banking, and our evaluation is that we are going to occur in proper all-around that people kind of concentrations,” Morton reported.

But he said Citi’s marketplaces company was a various tale owing to current market volatility throughout all property like commodities and overseas trade, one of its vital segments.

Morton mentioned his present estimate was for a second-quarter calendar year-in excess of-year income maximize “north of 25%” in marketplaces, while the government mentioned volatility also meant the scenario could alter rapidly.

“Just supplied the volatility, you know, even in two weeks, when you might be having moves like we’re possessing in the previous handful of days or so, that range could certainly fluctuate,” he stated, introducing corporate action was up about a 3rd for the next quarter.

Due to the fact Citi’s fastened money marketplaces organization was considerably bigger than its fairness business enterprise, the govt reported Citi was searching for “reduced hanging fruit” to grow in equities, like trying to get to secure equities business enterprise from its fixed income clients.

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

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