Citi, a US bank, has reported a surprise drop in its revenue as the volatile December period of Wall Street reduced the income on the bank’s bond trading division by 21 percent.
The third-largest bank in the United States of America said that its revenues dropped by two percent to $17.1 billion (£13.3 billion) in the three months to December. The numbers are below the expectations of $17.6 billion.
Michael Corbat, the chief executive of the company, stated: “A volatile fourth quarter impacted some of our market-sensitive businesses, particularly fixed income.”
Last December, Wall Street experienced its worst December since 1931, with the S&P 500 down by nine percent and the Dow Jones down bu 8.7 percent, finishing off the worst year for the stocks since the financial crisis in 2008.
The fixed income trading division of the bank, which handles currencies, commodities, and bonds, saw its revenue drop by 21 percent to $1.9 billion.
Citigroup said that the sharp decline “reflected a challenging trading environment characterised by volatile market conditions and widening credit spreads, particularly in December.”
Some of the major banks in the United States are scheduled to reveal their fourth-quarter earnings this week, including JP Morgan and Wells Fargo which are scheduled tomorrow. The results of Citi could suggest similarly disappointing results ahead of the revelation of the fourth-quarter earnings of the other US banks.
Despite the decline in revenues, Citi said that its profits increased to $4.2 billion from $3.7 billion a year earlier, and at $1.61 per share, surpassing the earnings per share forecasts.
Corbat said that the bank made “solid progress” last year and returned more than $18 billion of capital to shareholders.
Wall Street opened lower after the revelation of the results for Citi, the S&P 500 dropped by 0.5 percent, the Dow Jones 0.4 percent and the Nasdaq plunged by 0.7 percent.
The shares in Citigroup increased by 3.3 percent in early trading.