At Citigroup Inc. (C.N), bean counting and boring banking are in ascendance. Trading, not so much.

The lender said it will continue to cut costs in the second half of the year after trimming more than analysts expected last quarter. That outlook helped the stock rebound from a deeper drop after disappointing trading results.

“We’re going to do everything within our power” to meet a goal of a 12 per cent return on tangible equity this year, Chief Executive Officer Mike Corbat said in response to skepticism from analysts regarding the target during a conference call Monday. The firm won’t end planned investments in technology or risk its efforts to improve safety and soundness, he said. “But everything else is on the table.”

Citigroup shares fell 0.3 per cent at 12:05 p.m. in New York trading, making it the second-best performer in the 24-company KBW Bank Index. The other major banks all fell as Citigroup’s trading decline may herald a fourth straight quarterly drop for that business across Wall Street.

The results from Citigroup, the first giant U.S. bank to report earnings for the quarter, underscore how sell-side traders haven’t been able to capitalize on market swings. Markets keep getting jolted by President Donald Trump’s unpredictable threats to ratchet up tariffs on countries such as China and Mexico, as well as the Federal Reserve’s shifting stance on interest rates. That’s sent investing clients to the sidelines, taking a toll on banks matching buyers and sellers.

“As we saw volatility around the rate forecast, it really had an impact on investor client sentiment,” Chief Financial Officer Mark Mason said on a conference call with reporters. “Client conviction remains challenged.”

At Citigroup, revenue from trading slipped roughly 5 per cent, excluding a one-time gain on a stake in Tradeweb Markets Inc., which held an initial public offering. The decline was worse than analysts projected, and helped counter the strongest second quarter for its consumer division since 2013.

Citigroup’s struggle to improve efficiency and earnings from consumers was a sore spot for shareholders as the year began. Investors are paying particular attention to costs after companywide revenue climbed less than 1 per cent in 2018. Unable to rein in expenses fast enough, executives missed their own cost target, hurting their credibility with analysts.

Cutting Costs

Corbat has projected the firm can save as much as US$600 million annually after investing in technologies to run operations. The second quarter marked progress, with expenses down 2 per cent to US$10.5 billion -- almost US$100 million lower than the average estimate from analysts.

Investment banking revenue dropped 10 per cent to US$1.28 billion. That was slightly better than analysts estimated, helped by a surprise 2 per cent gain in fees from underwriting debt. Revenue from advising on mergers and acquisitions slumped 36 per cent.

The situation in the consumer business improved in the second quarter as it added US$3 billion in deposits and as cardholder spending jumped 6 per cent. Altogether, revenue from consumer banking climbed 3 per cent to US$8.51 billion, surpassing analysts’ projections. Revenue in those operations had stagnated in this year’s first three months.

Competitors JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc. are set to report results Tuesday, with Bank of America Corp. and Morgan Stanley following later in the week.

Here are other key numbers from the quarter:

• Citigroup set aside US$2.09 billion to cover the cost of souring loans, a 16 per cent increase that was in line with analysts’ estimates. Citigroup attributed the increase to additional spending on cards as well as “normalization” in credit quality within the institutional business.
• Total revenue climbed 2 per cent to US$18.8 billion including the US$350 million gain tied to Tradeweb, an electronic trading platform. Analysts had projected US$18.5 billion.
• Net income rose 7 per cent to US$4.8 billion. Earnings per share excluding the gain on Tradeweb were US$1.83. Analysts had estimated adjusted per-share earnings of US$1.80.