Investors better curb their enthusiasm.
Two of Wall Street’s biggest banks said they’re bracing for a slowdown in some of their most important businesses, even as equities hit new all-time highs.
Citigroup’s year-over-year trading revenue could be down as much as 25 percent in 2014, John Gerspach, the bank’s CFO, said at an investor conference here.
Gerspach said that the calm markets and unruly geopolitical events made trading harder, especially in May.
And Citi isn’t the only one looking at hard times ahead.
Profit from refinancing loans and selling debt could be tapering off, Christian Meissner, Bank of America’s head of global corporate and investment banking, said at the same conference.
Leveraged finance, which Meissner called one of BofA’s “key” areas, is “in the latter stages of a bull run,” he said.
BofA and Citi have faced scrutiny from the Federal Reserve, and have struggled to rebuild their balance sheets so they can pass more money on to investors through dividends.
Gerspach said that Citi probably won’t try to get the Fed’s blessing on a capital plan that would raise its dividend from a penny.
BofA, however, announced that it had resubmitted a plan.
Last month, the bank announced it botched its plan for the Fed because it had been miscalculating its safety net for about five years.