Is it time for Citi to "Re-Group" It's Investment Bank?

When Citigroup released its earnings today one of the dimmer numbers in an otherwise "okay" quarter was the poor performance of its investment bank which saw revenues plunge nearly 20 percent compared to the same quarter last year and a whopping 27 percent from the final three months of 2010, according to Shira Ovide's blog at WSJ.com.

Citigroup reported first-quarter net income fell 32 percent to $3 billion, or 10 cents a share, and that beat analysts' expectations by a penny a share.

<However, equity underwriting and debt underwriting all fell from a year ago and from the prior quarter. Lower debt underwriting was down 21 percent. As Ovide reports, advisory and underwriting work wasn't expected to be "grand for the first three months of the year, but Citigroup's investment bank managed even to come in below the low bar." She adds that Bank of America Merrill Lynch said Citi's weak i-bank results are "indicating some continued franchise weakening."

In contrast, says Ovide, just look at Citigroup's big bank peers. J.P. Morgan's investment bank pulled in $2.37 billion in first-quarter profits, representing nearly half of the bank's total profit for the first three months of the year. Investment banking fees were 23 percent higher than a year earlier.

The WSJ blogger points out that even at Bank of America, which was a big loser in the first quarter, revenue from investment banking fees soared 26 percent in the first quarter compared to the same period a year ago. Bank of America said the growth reflected strength in M&A work, as well as debt and equity underwriting especially in leveraged financing.