Citigroup's Profit Down By 36% Amid Weakness In Trading Business
As per the latest report, the profit of Citigroup tumbled by 36% during Q2 amid weakness in the trading business. The gains in the wealth management and personal banking unit were offset by the weak performance of the trading business.
If we look at Wall Street, it appears to be more of a widespread trend. So it wouldn't be wrong to say that the investment bankers and traders from Wall Street have hit a rough patch and are struggling with slow dealmaking.
Citigroup Revenue Down To $4.6 Billion
Citigroup's revenue from the markets was recorded at $4.6 billion, with a drop of 13%. According to experts, the subdued activity in the equities and the fixed-income business caused the slump. Similarly, the investment banking fees also took a hit of 24% and were recorded at $612 million.
Although the Wall Street operations of Citigroup were not up to the mark, the other business sectors helped it to offset a little bit of the weakness.
If we look at its revenue from wealth management and personal banking, it jumped 6% and was recorded at $6.4 billion. In addition, the firm also made $2.4 billion from branded cards.
Citigroup's net income also took a dive to only $2.92 billion, which is equivalent to $1.33/share during the 2nd quarter. If we look at the same period from last year, the net income was $4.55 billion, which highlights the severity of the situation.
However, JPMorgan Chase, which is also in the same business, posted an increase of 67% in its profits. Similarly, JPMorgan reportedly earned more interest payments and its purchase of the financial institution 'First Republic Bank.'
Wells Fargo, which is also well-known in the banking sector, reported a jump of 57% in its profits as well. So it appears that Citigroup is an outlier among its peers as most of the financial institutions reported healthy gains.