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Citigroup Inc. (C) joined JPMorgan Chase & Co. (JPM) in posting its lowest revenue since the height of 2008’s financial crisis as trading slumped. Wells Fargo & Co.’s revenue slid less as core lending businesses improved.
Citigroup said fourth-quarter revenue fell 7 percent from a year earlier to $17.2 billion. Net income declined 11 percent to $1.17 billion as trading revenue dropped 37 percent, excluding accounting adjustments, and investment banking tumbled 45 percent.
Concern that the European debt crisis would lead to a global economic slowdown curbed trading volume and investment- banking deals in the year’s second half. Wells Fargo, which relies least on trading among the six biggest U.S. banks, said a focus on loans helped soften the blow, with revenue down 4 percent to $20.6 billion. It had a record fourth-quarter profit.
“The banks with capital markets are ugly,” said James Reynolds, chief executive officer of Loop Capital Markets LLC, on Bloomberg Television. “Fundamental banking looks OK.”
Citigroup fell 6.8 percent to $28.66 as of 12:37 p.m. in New York, the worst performance in the 24-company KBW Bank Index. Wells Fargo, based in San Francisco, advanced 1.3 percent to $29.98. New York-based JPMorgan declined 2.2 percent to $35.12.
U.S. banks’ revenue growth in 2011 was probably the slowest since the Great Depression and is unlikely to improve in 2012, Mike Mayo, an analyst at CLSA Ltd., said on Bloomberg Television last month. JPMorgan, the nation’s largest bank by assets, said last week that revenue fell 18 percent to $21.5 billion.
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