Citi layoffs yet to correct dismal US banking performance
Second quarter results weren't great for JPMorgan investment bankers today, but did Citi's Institutional Clients Group (ICG) fare any better?
By and large, no, with JPMorgan having comparatively better performance in M&A, fixed income trading and debt capital markets quarter on quarter. In those areas, Citi revenue fell 44%, 21% and 23% respectively. Citi did better with equities and equity capital markets, with the former falling just 5% and the latter rising an impressive 49%.
This mimics the results last quarter, where JPMorgan dominated almost every category. Revenues in the ICG were down 7% from last quarter, and 9% year-on-year.
Much of this underperformance can be attributed to Citi's US team, where costs appear to be mounting. Despite the US team having the smallest quarterly drop in revenue at just 6%, it saw a staggering 78% fall in income, a year-on-year drop of 92%. Compensation and benefits are up 14% year-on-year firm-wide, which may have also contributed to the falling income.
Citi are attempting to rectify this by laying off 5000 people, around 2% of the company. Compensation has, quarter on quarter, fell 2% despite Citi CFO Mark Mason mentioning last month that only around 1600 of those layoffs would affect this quarter's results.
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