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Late Lunchtime Links: Oh. The bottom seems to have fallen out of Citi’s EMEA investment banking business in the second quarter

Citigroup's EMEA business seems to have fallen into a hole (Photo credit: eirikref)

Citigroup's EMEA business seems to have fallen into a hole (Photo credit: eirikref)

It is results season. Hence, we will be writing a lot about results. Today is the turn of Citigroup.

Citi’s second quarter results  weren’t too bad for its investment bank. They were also very different to JPMorgan’s. While JPMorgan did comparatively well in equities (a 9% year-on-year decline excluding DVA) and comparatively badly in fixed income (a 17% year year-on-year decline excluding DVA), Citi did very badly in equities (a 29% year-on-year decline excluding DVA) and ok in fixed income (a 4% year-on-year decline).

Both banks did badly in investment banking (M&A, ECM and DCM). At Citigroup, investment banking revenues were down 21% year-on-year in the second quarter. The biggest drop at Citi was in equity underwriting (down 39%).

What Citi’s second quarter results really tell us, however, is where in the world to situate yourself if you wish to be located in a growth market.

And the answer is: Latin America. As the chart below shows, compared to Citi’s excellent start to the year, the bottom seems to have fallen out its EMEA investment banking business in the second quarter. This is a little worrying given the concentration of Citi’s markets business in Europe. Asia didn’t do too well either.

On a year-to-date basis, however, the US is the place to avoid. For the first six months of 2012, Citi’s securities and banking revenues were down 4% (y-o-y) in EMEA but down 26% in North America. However, they were up 19% in Latin America and 12% in Asia.

Q2 revenues, Securities and Banking, Citi 

Source: Citigroup

Meanwhile:

Anthony Salz, the former senior partner of Freshfields Bruckhaus Deringer, is holding detailed discussions with Barclays about leading an independent probe into its business culture and practices. (Sky)

Sir Michael Rake is not the right man to be chairman of Barclays. It needs a complete change. (WSJ)

Bob Diamond initially negotiated that he’d keep deferred bonuses that could be worth more than $30 million. Then he changed his mind. (WSJ)

One person who knows Mr Agius well said his relationship with Mr Diamond resembled someone “riding a horse they had not been trained to ride”. (Reuters)

GLG Partners has started its first team in Asia. (Bloomberg) 

Goldman Sachs is setting up an office in Perth and has hired a natural resources banker from Macquarie. (WSJ)

Programme traders are losing their jobs as banks combine programme trading with electronic trading. Deutsche Bank, Goldman Sachs and Morgan Stanley have done, or are all, doing this. (Financial News)

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