Citigroup has suffered a significant decline in trading revenues that threatens to depress its earnings, according to people familiar with conversations between investors and the bank in recent days.
The Financial Times reports that with a week to go before the end of the quarter, the bank appears ready to join several of the powerhouses of bond trading in reporting a slide in trading revenues after a sharper-than-expected summer slowdown in markets businesses.
Some investors believe revenues will fall by significantly more than 10%.
In the meantime, the newspaper reports that the US government’s first courtroom test on allegations that banks defrauded investors by selling them defective mortgages begins on Tuesday against Bank of America in a case that lawyers say is already encouraging litigation against other banks.
The US attorney’s office in Manhattan brought civil charges against the bank and Countrywide Financial, the mortgage lender it acquired in 2008, alleging it defrauded Fannie Mae and Freddie Mac, two government-sponsored mortgage entities.
Blow for Citi as trading revenues drop (subscriber content)
BofA set to defend fraud claims in court (subscriber content)