Tuesday’s Headlines: The Citi Scenario—Sad Times for Investment Bankers

It’s never nice to wake up to the headline “More Bad News for Investment Bankers.” Yet that is exactly what Fortune warned in a story about Citi’s recent quarterly earnings. Figures may have beat analysts’ expectations, but they blew when it came to IB functions, as equity and bond trading bombed by 40 percent over the first quarter, and debt underwriting fell 20 percent. CFO John Gerspach told the magazine that IB layoffs are possible, and a recruiter reported that the bank laid off a recent grad shortly after he moved to New York City.

You think that’s bad? Here’s the real bomb: “While Citi's I-bank might be sinking, it's not falling faster than anyone else. In the first half of the year, Citi ranked as the seventh largest investment bank in terms of overall fees—the same place it had a year ago. Meaning investment banking is a Wall Street problem, not just a Citi one.”

 

Other News:

Goldman’s Q2 net income fell 11 percent and comp expenses fell 9 percent. [CNNMoney]

Goldman has created an in-house private bank of 30 employees. [WSJ]

State Street is the largest hedge fund servicer after buying Goldman’s hedge fund administration unit for $550 million. [DealBook]

Middle East is hot with investors. [NY Times]

A look at the largest clearing firms and custodians. [Investment News]

UBS announced a two-year deal to protect its top Australian bankers’ bonus pool. [Reuters]

G2 Investment Group and Guggenheim Partners plan to bid on Dick Clark Productions. [New York Post]

Lending has been both a boon and a bane for regional banks like KeyCorp, M&T and Comerica. [WSJ]