Citigroup has released its earnings for Q2 2016, revealing a dip in revenue for its securities services business, but a 10 percent increase in its total markets and securities services segment, as a whole.
In the Citi Institutional Clients Group, securities services saw revenues of $531 million, marking a decrease of 7 percent compared to the same period last year, which reached revenues of $562 million.
This is also a 6 percent dip compared to revenues for Q1 2016, which reached $570 million. According to Citi, this is partly because of the absence of revenues from recently divested business.
Equity markets saw a significant increase of 21 percent over Q2 last year, with revenues of $788 million. However, this included a $175 million charge to revenues for valuation adjustments on certain financing transactions.
Without this charge, Citi said, equity market revenues would have decreased by 4 percent. This was partly due to lower market activity in general, and partly down to comparison Citi’s strong trading performance in Asia in Q2 2015.
Fixed income markets revenues increased by 14 percent, compared to Q2 2015, to reach $3.47 billion. According to Citi, this is because of an increase in rates and currencies activity from corporate clients, and because of a generally better trading environment.
It was partially offset, however, by lower revenues in securitised products, driven by a drop in trading opportunities.
As a whole, the markets and securities services segment saw revenues of $4.66 billion, an increase of 10 percent over Q2 2015, which reached $4.24 billion, and an increase of 14 percent over Q1 2016, which saw revenues of $4.08 billion.
Michael Corbat, CEO of Citi, said: "These results demonstrate our ability to generate solid earnings in a challenging and volatile environment, again highlighting the resilience of our institution.”
He added: “We significantly improved our efficiency ratio, return on assets and return on tangible common equity from the first quarter.”
Citi’s treasury and trade solutions segment saw revenues of $2 billion, an increase of 5 percent over Q2 2015. This was attributed to a continuing growth in transaction volumes.
Investment banking revenues totalled $1.22 billion, marking a 6 percent decrease compared to Q2 2015, which saw revenues of $1.3 billion.
This was, however, a 39 percent increase over Q1 2016, which saw revenues of $875 million. Citi attributed this year-on-year drop to generally lower industry-wide activity.
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