Citigroup Outperforms JPMorgan in Investment Banking


Citigroup Outperforms JPMorgan in Investment Banking

Citigroup Inc. (NYSE:C) released its earnings earlier today for the first quarter of 2012. The firms earnings were down below what analysts had expected, at $0.95 versus forecast $1.01, but the market’s response to the release has been a positive one.

As of writing the company’s stock was up 1.71% to $33.98. Some of the positive effect can be explained by the poor Friday the company suffered seeing today as a rebound from the 3.51% fall last week. There were also some other good indicators in the company’s data.

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Revenue and earnings per share were well up from the last quarter of 2011. In a more interesting upside from today’s announcement over at Street of Walls showed that Citigroup Inc. (NYSE:C)’s investment banking arm actually outperformed JPMorgan’s in the first quarter of 2012.

Citigroup Outperforms JPMorgan in Investment Banking

The figures,  show that Citigroup Inc. (NYSE:C)’s investment banking arm managed to earn 2.3% last quarter while JPMorgan was down 23% over the same period. T

he surprising result describes at least one positive thing happening at Citi while looking like a massive black eye for JPMorgan whose stock was down almost 0.5% at time of writing. Cit’s fees in investment banking were $811 million contrasting with JPMorgan’s figures of $1.4 billion.

Last year the investment wings of the banks made $793 million and $1.8 billion respectively. JPMorgan Chase & Co. (NYSE:JPM) maintains its global leadership in investment banking fees, but the year on year fall of 23% will hurt the bank’s outlook.

Citigroup’s good performance in the area in comparison to the giant in investments could mean a change in confidence among investors about the two banks.

When the other financials report later this week it will be easier to detect a pattern and decide whether or not Citi’s results are an outlier or whether the bank really is outperforming in attracting investors to that degree. The movement could be very important in the future with a possible flight of investors from JPMorgan.

As the financial reporting continues there will be more pressure in the market as media and investors alike look for meaning in the slew of financial earnings figures to come this week. JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo reported last week and now Citigroup has reported, leaving Goldman Sachs to report tomorrow and Bank of America and Morgan Stanley reporting on Thursday.

Citigroup’s shares are still moving in the opposite direction to JPMorgan’s today and the firm will be eyeing a bigger role in the investment market if it can maintain the higher rate of fees.