Citigroup lowers forecast for margin growth on rate expectations

New York

CITIGROUP Inc reduced its forecast for net interest margin, the difference between what it makes on loans and pays for funds, on expectations interest rates will remain low for a longer stretch than bank executives previously thought.

The margin will be about 2.90 per cent in the second half of 2016, down from a previous forecast of 2.95 per cent, chief financial officer John Gerspach said on Friday on a conference call with analysts. The figure was 2.86 per cent in the second quarter. New York-based Citigroup shares have extended this year's decline to almost 15 per cent.

"This is lower than our prior outlook of around 295 basis points for the remainder of the year, reflecting som…