by Burke Speaker | April 14, 2014 9:05 am
Citigroup (C) announced that it will cut up to 300 jobs in its stock and bond trades division in an effort to reduce costs.
The announcement comes as Citigroup releases its first-quarter earnings report that showed a revenue drop in its trading and lending businesses.
The cuts represent some 2% of the workforce in the third largest bank’s global markets division.
“We continue to tightly manage expenses, making targeted headcount reductions in light of current market conditions,” Danielle Romero-Apsilos, a spokeswoman for the New York-based bank, told Bloomberg. “At the same time, we are adding some talent strategically.”
Bloomberg cites sources noting that a slump in bond trading is mostly to blame for the cost cutting measures.
A slump in bond trading, a business that once fueled Wall Street’s rebound after the credit crisis, is now eroding banks’ earnings. Citigroup Chief Financial Officer John Gerspach, 60, told investors last month he expected trading revenue to drop by a “high mid-teens” percentage. Equities revenue was holding up better than fixed income, which accounts for an average 80 percent of markets revenue, he said March 3 at a conference in Orlando, Florida.
The news comes as Citigroup released its earnings report this morning — which reassured Wall Street that the bank not significantly suffering as many feared.
Citigroup quarterly net profit was up 4% — due mostly to as a smaller than expected loss on its assets.
The bank noted that Q1 adjusted net income rose to $4.15 billion ($1.30 per share) from $4.00 billion — which was $1.29 per share at this point last year.
Polled Thomas Reuters analysts expected earnings at $1.14 per share.
C stock is up 3.4% pre-market on its earnings report.
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