Citigroup profit drops 36% as trading slump casts cloud over earnings
CITIGROUP’S profit tumbled 36 per cent in the second quarter as weakness in the Wall Street bank’s trading business blunted gains from its personal banking and wealth management unit.
Wall Street traders have hit a rough patch, joining investment bankers whose businesses have been weighed down for months by a slump in dealmaking.
Citi’s markets revenue fell 13 per cent to US$4.6 billion on more subdued activity in fixed income and equities, while its investment banking fees plunged 24 per cent to US$612 million.
While its Wall Street operations dragged, the lender’s consumer business helped partly offset some of the weakness.
Revenue from its personal banking and wealth management division climbed 6 per cent to US$6.4 billion, including an 8 per cent gain for branded cards to US$2.4 billion.
Net income sank to US$2.92 billion, or US$1.33 per share, in the three months to Jun 30, the bank reported on Friday (Jul 14). That compares with US$4.55 billion, or US$2.19 per share, a year earlier.
In contrast, earlier in the day, JPMorgan Chase posted a 67 per cent jump in profit as it earned more from interest payments and also benefited from the purchase of First Republic Bank, while Wells Fargo reported a 57 per cent rise in profit. REUTERS
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