Citi is expecting trading to fall in the ‘high single-digits’ in the first quarter

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Citi CFO Mark Mason is expecting a decline in first-quarter trading as the markets continue to recover.
But investment banking revenues have been strong at Citigroup, Mason said.

The markets have improved to start the year compared with the dismal end of 2018, but they haven’t recovered to full strength, which will likely result in first-quarter trading losses, according to Citigroup chief financial officer Mark Mason.

At a conference Tuesday, Mason said he anticipated the bank’s fixed income and equities trading revenues would decline in the "high single digits" compared with the the first period of 2018, which was a strong quarter in equities.

"We’ve started to see markets stabilize and trade higher, but we haven’t yet seen a full recovery from a year ago," Mason said.

Underwriting revenues have been sluggish across Wall Street as well, but in investment banking Mason said he was expecting gains.

"Quarter-over-quarter they’re likely to be down, but year-over-year we expect there to be higher revenues, especially in M&A and investment grade debt issuance," Mason said.

Like most banks, Citi in January reported a hefty decline in fourth-quarter trading revenues, which fell 11% to $3.1 billion amid a December market rout. Investment banking revenues were down slightly in the quarter to $1.3 billion, as a 47% jump in advisory fees was offset by a chill in underwriting.