Citigroup, the US banking giant which twice had to be bailed out by American taxpayers, has been losing market share on Wall Street, its latest results revealed.
A sharp slide in revenues from its bond trading desks shocked investors, who sent Citigroup shares down more than 6 per cent in midday trading in New York. The bank has also fallen from fourth to eighth place in the league tables of mergers and acquisitions advisers.
"This was one of the weaker quarters for trading," the chief financial officer John Gerspach conceded, but he added that "one quarter doesn't make a trend" and that the bank had been hiring new talent to help turn things around.
Overall, Citigroup reported a net profit of $1.3bn (£810m) for the final three months of 2010. It was the bank's fourth consecutive quarterly profit and compared with a year-earlier loss of $7.6bn, but earnings per share were 50 per cent below the figure analysts had expected.
Fixed-income trading revenue alone dropped 58 per cent from the third quarter – compared with a 7.9 per cent drop at larger rival JPMorgan Chase, which reported last week.
Trading volumes are down across Wall Street, but Citigroup's performance is likely to put it among the banks losing most market share. The bank has been working since the credit crisis to slim down its bloated balance sheet, sell off underperforming assets and regroup around core growth businesses, particularly overseas. For 2010, it recorded a net income of $10.6bn, the first year under Vikram Pandit it has posted a profit.
Alan Villalon, an analyst at Nuveen Asset Management in Minneapolis, said the figures "highlight that Citi, over the last couple of years, have been dealing with a lot of issues and they've lost a lot of people".