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Portfolio > Economy & Markets

Citi, JPMorgan Warn of Q2 Slump

By Jennifer Surane

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Jamie Dimon (Photo: Bloomberg)

The two biggest trading houses on Wall Street are warning of a slump.

Citigroup Inc. said trading revenue has declined so far this quarter, joining JPMorgan Chase & Co. in reporting a downturn for the business.

A burgeoning trade war, the U.K.’s planned exit from the European Union and escalating tension between the U.S. and Iran have weighed on market sentiment in recent weeks, according to Citigroup Chief Executive Officer Michael Corbat.

“Clearly, trading revenue and wallets right now are down,” Corbat said Wednesday at a conference in New York. “In periods of uncertainty, things tend to become pretty muted.”

Corbat declined to give specific figures about his firm’s performance so far this quarter, saying Chief Financial Officer Mark Mason would give more details in coming weeks.

JPMorgan CEO Jamie Dimon said Tuesday that his firm’s trading revenue had declined 4% to 5% during the first two months of the second quarter, while noting that “the next month could dramatically change that.”

Corbat also voiced some optimism for his firm’s ability to improve results from its markets business. He said the company is focused on developing better ties between its trading and treasury-management units to improve the experience for corporate customers.

“We’ll likely continue to take share,” Corbat said. “We’ll go up and down with the market. But I would expect that we should either match, or, probably more importantly, outperform over time.”

Corbat also said Wall Street will begin to benefit as central banks around the world step back from quantitative easing, or bond buying to stimulate economic growth, because the policy change will create room for banks to step in and provide additional liquidity or financing.

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