By Saabira Chaudhuri
Bank of America Corp. and Citigroup Inc. both disappointed
investors, giving weak outlooks for trading revenue.
Bank of America's chief executive, Brian Moynihan, said at an
industry conference on Tuesday that fourth-quarter trading revenue
would be lower than both year-ago levels and the third
quarter's.
Citigroup's CEO Michael Corbat estimated that the New York
bank's markets revenue would be down year-over-year by about
5%.
In particular, Mr. Corbat indicated that he expects fixed
income, currencies and commodities trading to fall, saying
Citigroup "didn't escape" sharp moves in rates, foreign exchange
and bonds early in the fourth quarter.
Bank of America's shares fell 2.1% in recent trading, while
Citigroup's dropped 2.6%. Shares of rivals Goldman Sachs Group
Inc., Morgan Stanley and J.P. Morgan Chase & Co. also logged
declines that were broader than those shown by the S&P 500.
Trading revenue at the nation's biggest banks has been pummeled
in recent quarters, although third-quarter results largely topped
Wall Street expectations as fixed income, currencies and
commodities trading revenue came in stronger than estimated.
Bank of America in October reported trading revenue, excluding
adjustments to the value of the bank's debt, rose 9.2% to $3.27
billion. FICC revenue was particularly strong as the lender
benefited from an easy comparison with a year-ago period in which
it fell 20%. In the third quarter, FICC trading revenue was up 11%
from the third quarter of 2013 to $2.25 billion. Equity sales and
trading rose 5.9% from the third quarter of 2013 to $1.03
billion.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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