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Bonus Watch '17: Actually, Citi Couldn't Care Less About Trading Revenues, Thank You Very Much

No Brexits this quarter, unfortunately.
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Back around this time last year, there was some question as to whether the Brexit-fueled burst of financial market activity that lifted trading revenues at major global banks was a sign of things to come or just a one-off fling. With every passing month, the answer is increasingly clear. As Britain continues to wave Europe goodbye (howeverfitfully), traders continue to wave goodbye to last year's unusually decent bonuses. As for the third quarter's prospects, Citi isn't looking too optimistic:


Citigroup Inc third-quarter total markets revenue is running about 15 percent less than a year earlier when volatility was boosted by reactions to the Brexit vote and U.S. elections, Chief Financial Officer John Gerspach said on Monday at an investor conference.

That said, maybe don't cancel your luxury one-day trip to Antarctica or your fake wine order just yet, despondent traders. At least not if you're at Citi. Despite similar warnings, Citi has managed to beat diminished trading expectations in recent quarters. In the second quarter, for instance, markets revenue came in at just 7 percent under the previous year's total, better than the 12 percent drop Gerspach had predicted.

But you can go ahead and give up on hope for a D.C. boost:

Gerspach also said that easing of bank regulations is going more slowly than he had hoped, apparently because of still-vacant positions at the Federal Reserve and Treasury Department.

Given how things are currently going at 1600 Pennsylvania Avenue, it might be advisable not to hold your breath in that arena. Just take a look at what currently constitutes the Trump administration tax plan and extrapolate your chances for a deregulatory package from there.

It is interesting to observe here how, at least so far, Wall Street has been let down in just the same way that Trump's over-analyzed independent white-working-class vote has been. He campaigned promising a gleaming new border wall, a total shutdown of Muslim immigration, an end to offshoring, and a dismantling of Dodd-Frank. It's common to see descriptions of the folks who cheered at those three populist promises – which are as-yet-unfulfilled and likely unfulfillable – as rubes. But what about the senior Wall Street managers who, regardless of politics, swallowed the Dodd-Frank stuff whole? Wasn't that also kind of silly?

Citigroup sees third-quarter markets revenue down 15 percent vs year-earlier [Reuters]



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