By Dhirendra Tripathi
Investing.com – Citigroup (NYSE:) shares fell by more than 4% in Wednesday’s trade after the financial services giant’s finance chief warned of rising costs even as revenue growth in various verticals slows.
Expenses in the second quarter will likely jump to “somewhere in the middle” of a range of $11.2 billion to $11.6 billion, Bloomberg quoted its Chief Financial Officer Mark Mason as telling investors at a virtual conference Tuesday. That compares with costs of $10.4 billion a year earlier.
Companies in the U.S. are facing higher wage costs amid a rising inflation in prices of raw materials and other input costs. At the same time, consumer spending is now slowing as people have spent their stimulus checks and states end their Covid-19 supports.
Mason also warned many of its biggest businesses would suffer from a drop in revenue in the second quarter, according to Bloomberg. He signaled revenue from the bank’s trading operations will probably fall by about 30% from a year ago.
He said strength in equities would be countered by weakness in its sprawling fixed-income franchise.
The firm’s U.S. consumer business has also been beset by slowing loan growth as credit-card holders pay back their loans at faster rates. Revenue in the unit is likely to fall by around 15%, Mason said, as per Bloomberg.
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