Despite Downturn-Filled Quarter, Citigroup Talks Of Reinvestment
Despite second-quarter revenue declines and bottom-line losses for some of its many divisions, Citigroup says it remains committed to reinvesting and new hiring, particularly in information technology and in its international operations.
Chief Executive Vikram Pandit said during Friday's conference call: "While we have maintained expense discipline, we are reinvesting in our core businesses, including significant investments in technology." The investments will be self-funded by Citi's ongoing asset sales, he adds.
Pandit said Citi needs to continue ramping up both retail banking (Latin America and Asia in particular) and investment banking businesses, anticipating a recovery from recent market turbulence. "We will continue to invest in equities, in securities banking. We can achieve a lot more there," Pandit said. "We keep hiring some great people in every one of our businesses."
Citigroup's overall headcount declined about 1.5 percent during the second quarter to 259,000 compared with 263,000 three months earlier and 279,000 a year ago. Compensation and benefits expenses dropped 6 percent quarter-to-quarter, to $6.1 million.
The securities and banking division had a tough quarter. Investment banking revenue of $674 million declined 36 percent compared with the first quarter. Debt underwriting and equity underwriting dropped 32 percent and 30 percent respectively, advisory revenue shrank 56 percent, fixed income markets (excluding credit valuation adjustment) dropped 31 percent and exuity markets dropped 48 percent.