Citigroup Inc. (C)  

​Citigroup expects 3Q trading revenue to rise 


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Paul Conley | FlashRatings | Wednesday, September 14, 2016 6:25 PM EDT
Citigroup (C) said revenue from its trading operations is trending higher than had been expected in the third quarter, and will rise by “mid single digits” from a year earlier.

Chief Financial Officer John Gerspach cited strength in both fixed-income and currencies trading for the rise. Notably, Gerspach said third-quarter trading revenue was still expected to trail that of the second quarter. The second quarter is seasonally stronger than the third, and this year volatility related to the Brexit vote in June boosted trading revenue in 2Q.

Gerspach announced the expected increase at the Barclays 2016 Global Financial Service Conference in New York.

Citigroup is the world’s largest currency trader by market share, according to Bloomberg News. The company’s trading revenue also includes proceeds from its substantial bond operations and its much smaller equities operation.

Bond trading is experiencing increasing volatility ahead of the meeting of Federal Reserve policy makers on Sept. 20-21.
In contrast to the new higher forecast for trading revenue, Gerspach said revenue from investment banking so far in the third quarter was a “little lighter than estimated.”

Analysts had no immediate reaction to the news, which came just one day after Societe Generale downgraded Citigroup from "hold" to "sell". A week earlier, analysts at Nomura maintained their "buy" rating for Citigroup but reduced their price target from $57 to $55.

Citigroup has 72 percent positive ratings from analysts, with a median price target of $57.50.

Shares in Citigroup fell 18 cents, or 0.38 percent, to $46.75.