LatAm and Asia form bright spots for Citi
15 Aug 2012
Citigroup’s institutional clients group increased
its revenues in Latin America and Asia in the first half of this year,
contrasting with revenue drops in the US and Europe, and in line with a
strategical focus on emerging markets.
In a quarterly 10q filing with the Securities and Exchange
Commission last week, Citi said that first half revenues for the institutional
clients group in Latin America were $2.4bn, 14% up from the $2.1bn that it
posted in the same period last year.
In Asia, the business had first half revenues of $3.8bn,
10% up from the $3.5bn it earned in the first six months of last year. Earlier
this month, Citi launched a joint investment banking venture in China with
Orient Securities.
By contrast, North American revenues for Citi’s
institutional clients group fell 19% to $4.6bn over the half year, while
revenues in Europe were 1% down at $5.4bn.
Vikram Pandit, chief executive of Citi, said at the bank's
2012 Financial Services Conference in March that emerging markets were at the
foundation of its strategy to facilitate international trade and capital
flows.
He said: "In total, almost half of Citi’s revenues and
nearly 60% of our net income in 2011 was generated in the emerging markets.”
Pandit added that the firm generated more than $1bn of
revenues in 12 different countries last year, including China and India. He
added that “total revenues from Africa also approached $1bn”.
Pandit said: “We employ Mandarin and Portuguese speakers
on our desks in South Africa to execute intra-emerging markets trades between
Africa, Brazil, and China. In 2011, over one third of securities and banking
revenues were from the emerging markets.”
Citi declined to comment beyond the filing.
Morgan Stanley, meanwhile, also reported rising revenues
in Asia.
The bank increased its revenues from Asia by 22%, to
$1.9bn from $1.5bn in the first half of last year, according to the bank’s
quarterly SEC fling last week. In contrast, US revenues fell by 18% and European
earnings declined by a third over the same time period.
The filing said that in the second quarter of last year
Morgan Stanley recorded a loss of $17m due to its joint venture with Japan's
Mitsubishi UFJ Financial. In contrast, in the second quarter of this year the
Mitsubishi stake recorded a profit of $54m.
Morgan Stanley declined to comment beyond the filing.
At JP Morgan's investment bank and Goldman Sachs, revenues
fell in every region between the first half of last year and this year.
Earlier this week BTG Pactual, a Brazilian investment
bank, released its first results as a public company , revealing that its return
on equity beat that of its US rivals.
- Write to Shanny Baser, shanny.baser@dowjones.com
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