Cit­i­group mar­kets, in­vest­ment bank­ing rev­enue slow: CFO

The Pak Banker - - FRONT PAGE -

Cit­i­group Inc first-quar­ter mar­kets rev­enue is run­ning 15 per­cent lower than a year ear­lier and its in­vest­ment bank­ing rev­enue is off by 25 per­cent, Chief Fi­nan­cial Of­fi­cer John Gerspach said to­day. "It has been a tough quar­ter," Gerspach said at an in­vestor con­fer­ence.

The com­pany ex­pects to take a $400 mil­lion charge in the quar­ter "to re­size both our in­fra­struc­ture and ca­pac­ity" in re­sponse to the tough en­vi­ron­ment, he said. Gerspach said mar­ket volatil­ity has hurt both trad­ing and new is­suance. In fixed-in­come, spread prod­ucts have been un­der pres­sure, while rev­enue from rates and cur­ren­cies is be­ing com­pared against good per­for­mance a year ear­lier.

In­vest­ment bank­ing rev­enue is down largely be­cause cus­tomers is­sued less debt and equity, he said. The slow­down has come across the com­pany's busi­ness re­gions around the world, he said. The com­pany has seen no change since Jan­uary in its out­look for costs for bad en­ergy loans. When this quar­ter ends, re­serves for en­ergy loans will be about 4.5 per­cent of the funded amount, he said.

Aside from the repo­si­tion­ing charge, core ex­penses for the com­pany's Ci­ticorp busi­nesses will be about the same in the first quar­ter as the fourth quar­ter, he said. Cit­i­group shares were down 2.7 per­cent at $41.45 in af­ter­noon trad­ing.

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