JPMorgan's first quarter results were out last week. Today we have the Citigroup results, which were unleashed a few hours ago. JPMorgan's results weren't too hot: the U.S. bank suffered a 19% decline in overall profit and its shares fell 2.9%. At Citi, meanwhile, profits are up 4% overall and the bank's shares rose nearly 4% in pre-market trading.
Is Citigroup a better investment bank to work for right now than JPMorgan? Maybe - unless you happen to be in M&A.
As we reported last week, JPMorgan's M&A bankers had a massive first quarter. They've advised on some big deals so far this year (eg. Ziggo's $10.8bn acquisition of Liberty Global, Amec's $3.3bn bid for Foster Wheeler in Europe, or Comcast's $45bn bid for Time Warner Cable and Actavis's $25bn bid for Forest Laboratories in the US). As a result, JPMorgan's M&A advisory revenues rose a massive 50% year-on-year in the past three months.
Citigroup didn't do nearly as well by comparison. It's M&A revenues fell 14% in the first quarter.
JPMorgan's first quarter equities sales and trading results weren't too hot. In fact, they fell 3% year-on-year - something the bank attributed to poor results in its equity derivatives business. At Citi, by comparison, equities sales and trading revenues rose 13% in the first quarter.
JPMorgan's fixed income currencies and commodities (FICC) revenues fell 21% year-on-year (excluding DVA) in the first quarter. Usually, JPMorgan does better than its rivals in fixed income sales and trading. Not this time. Citi's FICC revenues also fell, but 'only' by 18%.
Citi has been successfully hammering down the costs in its investment bank (witness the chart below, from today's presentation). At JPMorgan, however, costs have been rising in the corporate and investment bank even though compensation was cut 8% year-on-year in the first quarter.
In reality, however, Citi is playing these figures a little. While ‘core’ expenses may indeed be falling at its institutional clients group, overall expenses as a percentage of the total have been a little more erratic. They were 54% of revenues in the first quarter, making them steady on the first quarter of 2013. However, in the fourth quarter of 2013 expenses were a troublesome 74% of revenues - something the bank attributed to 're-positioning charges'. It may help explain why Citi has reportedly been cutting heads in recent weeks.