March 2, 2015 / 3:55 PM / 4 years ago

UPDATE 2-Citigroup CFO sees markets revenue declining in first quarter

(Adds recent JPMorgan comments on markets)

NEW YORK, March 2 (Reuters) - Citigroup Inc expects its revenue from fixed-income and equity markets to decline in the first quarter from a year earlier, largely because of a slow start in spread products and a hit during the January revaluation of the Swiss currency, Chief Financial Officer John Gerspach said on Monday.

The magnitude of the revenue decline looks like it will be in the “mid-to-high” single-digit percentage range, Gerspach said at an investor conference.

Gerspach said revenue in the interest rates and currencies portion of the business would still be higher than a year earlier. If not for the hit the company took when the Swiss franc was suddenly allowed to rise in January, Gerspach said he would characterize that revenue increase as “strong.”

Last week Daniel Pinto, chief executive officer of JPMorgan Chase & Co’s corporate and investment bank, said markets revenue in the first quarter was up from a year earlier even though the company had sold a commodities business in October. The improvement has come on increases in client activity and volatility, he said.

Pinto’s comments encouraged Bernstein analyst John McDonald to raise his estimate for JPMorgan’s first-quarter results.

Citigroup still expects to meet 2015 targets it set for return on assets and efficiency, Gerspach said.

The company “looks forward” to getting a verdict from the U.S. Federal Reserve in the next 10 days on whether it is allowed to pay out more capital for dividends and share buybacks, Gerspach said.

The Fed plans to release the quantitative results of stress tests of big banks’ balance sheets on Thursday afternoon and announce on March 11 whether it would approve bank capital plans.

The outcome is the biggest single issue facing Citigroup. Last year it failed to win approval for additional payouts, which are key to the company’s goal of increasing shareholder returns.

Shares of Citigroup were up 1.7 percent at $53.29 in morning trading. (Reporting by David Henry in New York; Editing by Chizu Nomiyama and Lisa Von Ahn)

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