Advanced Theory & Practice of Bonds

Recognized under IBF-FTS | 7-8 June 2022 | 12 CPD Hours

Comprehensive 2-day course on bonds designed for private bankers, wealth managers and advisors.

Citigroup’s reported a 46% YoY drop in Q1 2022 net profits to $4.3bn due to higher cost of credit, higher expenses, and lower revenues. Revenues fell 2% YoY to $19.2bn. Citi’s cost of credit was at $755mn in Q1 compared to -$2.1bn in the prior year period due to lower net release in the allowance for credit losses (ACL). This included a $1.9bn ACL build related to Citi’s exposures in Russia and owing to the overall conflict. Thus, overall operating expenses rose 15% YoY to $13.2bn, hurting profits. Citigroup also repurchased ~50mn shares and returned a total of $4bn to shareholders in the form of repurchases and dividends during the quarter. Its CET1 ratio was down 80bp QoQ to 11.4%.

Citi’s 4% Perps were flat at 94.2 cents on the dollar, yielding 5.8%.

Goldman Sachs reported Q1 2022 net earnings of $3.9bn, down 42% with net revenues of $12.9bn down 27% YoY. Investment Banking generated quarterly net revenues of $2.4bn, down 36% YoY due to lower net revenues in equity and debt underwriting, an industry wide phenomenon during the quarter. Global Markets net revenues were $7.9bn, up 4% YoY thanks to FICC revenues of $4.7bn, rising 21% YoY benefitting from currencies and commodities even as equity revenues fell 15% to $3.2bn. The bank also reported provision for credit losses at $561mn compared with a net benefit of $70mn in Q1 2021. This was due to the impact of macroeconomic and geopolitical events, and individual impairments on wholesale loans. During the quarter, the firm repurchased $500mn in stock and paid $711mn in dividends. Its CET1 ratio was up 20bp QoQ to 14.4%.

Goldman’s 4.95% Perp was flat at 98.4 cents on the dollar, yielding 5.6%.

Morgan Stanley reported that its Q1 2022 net income was down 11% YoY at $3.7bn with a 5% drop in revenues to $14.8bn. Institutional Securities net revenues were at $7.7bn, down 11% as investment banking fell 37% while Equity revenues rose 10% and Fixed Income was almost unchanged. Wealth Management net revenues were almost unchanged at $5.9bn – asset management revenues rose 14% while transactional revenues fell 20% due to decreased client activity. Its saw a $57mn charge in provision for credit losses vs. a $98mn release during the same period last year. The bank bought back $2.9bn of its stock and declared a $0.70 quarterly dividend. Its CET1 ratio was down 220bp YoY to 14.5% due to “higher RWAs, change in other comprehensive income (loss) and the Firm’s capital actions”.

Morgan Stanley’s 5.875% Perp was flat at 105.5 cents on the dollar, yielding 4.5%.

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