Citigroup Trading Revenue to Decline From Pandemic-Charged Highs
(Bloomberg) -- Citigroup Inc. is seeing the end of the pandemic-induced trading craziness.
Fourth-quarter trading revenue will likely be “flat to modestly down” from the $3.41 billion Citigroup collected in the same period in 2019, Chief Financial Officer Mark Mason said. That compares with the $3.9 billion haul the bank turned in just one year ago, when the pandemic spurred volatility across markets.
“We’re seeing the normalization that we were expecting in fixed-income play-through, we’re also seeing pressure from just the trading environment,” Mason said Wednesday at an investor conference. “But that’s being offset in part by some of the strong equities performance that continues.”
In all, Citigroup still expects adjusted revenue for the full year to drop by a percentage in the mid-single digits, Mason said. Expenses, meanwhile, will likely climb by a similar percentage as the bank invests in hiring and spends on divestitures as it exits retail operations in 13 markets across Asia and Europe.
The firm has also been investing in underlying systems and technology to satisfy a pair of consent orders it received last year. Citigroup has submitted plans for resolving those demands to regulators and it’s making progress on fulfilling its promises, Mason said.
Nearly half of that spending is on third-party resources, such as consultants, who will help the firm design the new systems it needs, he said. It has also hired 3,000 people to help with the work.
“We’ve got clarity, frankly, on the idea that it’s a multiyear spend that is going to peak and then level off and ultimately we’ll see some benefits as the costs come down,” Mason said.
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