Back to top

Image: Bigstock

Citigroup (C) Projects Q4 Trading Revenues to Climb 20% Y/Y

Read MoreHide Full Article

At the Goldman Sachs Group Inc.’s financial services conference in New York on Wednesday, Citigroup Inc.’s (C - Free Report) Chief Financial Officer, John Gerspach, announced the recent outlook for the fourth quarter. The bank expects fourth-quarter 2016 trading revenue to climb by 20% year over year, driven by heightened trading activities.

Broadly, the positive outlook comes on the back of solid trading activities in the first three quarters of 2016. Brexit in June, followed by uncertainty regarding results of the U.S. presidential election in November and expectations of a Fed rate hike, all together resulted in a trading boom. Per Mr. Gerspach, both corporate clients and investor clients’ trading demand witnessed an upswing.

“We had a lot of good client activity coming out of the Brexit vote,” Mr. Gerspach said, speaking at the Goldman Sachs Group Inc. financial services conference. “Coming out of the election that client engagement stayed very, very high.”

Moreover, the share price movement reflected investors’ optimism. Shares rose over 14% year to date.



Earlier this week, at the same conference, CEO James Dimon – of another Wall Street giant – J.P. Morgan Chase & Co. (JPM - Free Report) , revealed his expectation of fourth-quarter trading revenue to be up around 15% year over year. The mega bank, Bank of America Corp.’s (BAC - Free Report) CEO – Brian Moynihan – also anticipates 15% rise in fixed-income trading division.

Further, at the conference, Mr. Gerspach confirmed commitment of the bank’s investment in Mexico, as Donald Trump had promised in his campaign to work on improving trade relations between the U.S. and Mexico. “We really don’t know what the administration is going to do,” Mr. Gerspach said. He also said Citigroup “feels very good” about Mexico’s ability to compete in the global economy.

Among other divisions, Citigroup anticipates seasonal decline in mortgages in the fourth quarter, while a year-over-year revenue growth and positive operating leverage is expected in international consumer.

On the cost front, Citicorp business expenses are likely to decline on a sequential basis.

Market revenue has been under strain for the last few years. Therefore, this positive outlook comes as a relief for the Wall Street banking giants.

Currently, Citigroup carries a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among some better-ranked stocks, Comerica Incorporated (CMA - Free Report) has been witnessing upward estimate revisions for the last 60 days. Further, the stock has surged over 65% so far this year. It currently holds a Zacks Rank #2 (Buy).

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Published in