Citigroup Warns Its Trading Revenue Could Plunge 25% In Q2

brianwc / FlickrCiti's trading revenue is falling off a cliff

In a presentation at the Deutsche Bank Global Financial Services Investor Conference, Citigroup CFO John Gerspach warned that the bank's equity and fixed income trading revenue could be down 20%-25% compared to the prior year.

Gerspach said that for the second quarter:

"Institutional revenues should decline, driven by lower trading activity relative to both the prior quarter and the prior year. Historically low volatility, an uncertain global macro environment, and geopolitical events have all combined to drive volumes lower, particularly in May. And so this quarter's trading results could vary depending on the level of client activity we see over the next five weeks. We currently expect total trading revenues for equities and fixed income to be down in the range of 20% to 25% year-over-year."

Citigroup's warning on declining trading revenues comes after JPMorgan warned in its 10-Q for the first quarter that its markets revenue, comprised of consumer and investment bank fixed income & equities, could decline 20% in the second quarter.

JPMorgan cited a "challenging environment" and lower client activity levels as the reasons for its decline.

Citigroup shares came off their best levels following Gerspach's comments, but remain higher by 0.7% in afternoon trade.

You can view Citigroup's entire presentation here and listen to the webcast here.