By Christina Rexrode 

Citigroup Inc. Chief Financial Officer John Gerspach estimated Wednesday that the bank's fourth-quarter trading would rise nearly 20% compared with a year ago.

"We had a lot of good client activity coming out of the Brexit vote," Mr. Gerspach said, speaking at the Goldman Sachs Group Inc. financial services conference. "Coming out of the election that client engagement stayed very, very high."

Citigroup and other banks have experienced a strong three quarters of trading, fueled first by the U.K.'s surprise vote to leave the European Union in June and continuing with the uncertainty caused by the results of the U.S. presidential election in November and months of guesswork about when the Federal Reserve might raise interest rates. Mr. Gerspach said that trading demand had come from both corporate clients and investor clients.

The trading boom has boosted U.S. banks throughout the summer and fall, and is a marked turnaround from recent years of shrinking trading revenue.

Mr. Gerspach's comments echoed those made by two rival banks at the same conference the day before. J.P. Morgan Chase & Co. CEO James Dimon said Tuesday that he expects fourth-quarter trading revenue to be up about 15% from a year earlier. Bank of America Corp. CEO Brian Moynihan said he expected a 15% gain in his bank's fixed-income trading division.

Many of the questions asked of Mr. Gerspach were about how Donald Trump's presidency would affect Citigroup. Mr. Gerspach said it was too early to tell what policies the new administration would follow through on and in what time frame. "I have very few answers," he joked.

But Mr. Gerspach said he hoped the new administration would create a regulatory framework that "allows American companies to remain competitive."

"The first thing I would ask for is nothing new -- no new rules," Mr. Gerspach said. "If you haven't figured out yet how all the existing rules work together, don't put on anything else." He cited as an example the differences between several rules about capital and liquidity ratios.

Mr. Gerspach said Citigroup remained committed to its investment in Mexico, where it runs the country's second-largest retail bank. Mr. Trump said on the campaign trail he would build a border wall between the U.S. and Mexico and upend trade relations. "We really don't know what the administration is going to do," Mr. Gerspach said. He also said Citigroup "feels very good" about Mexico's ability to compete in the global economy.

Mr. Gerspach also said Citigroup would look to gain share in equities and rates from retrenching European rivals.

Write to Christina Rexrode at christina.rexrode@wsj.com

 

(END) Dow Jones Newswires

December 07, 2016 09:50 ET (14:50 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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