Citigroup may be losing ground in a business that is central to its recovery plan, as rivals catch on to how much money the unit makes.
Reuters reports that the bank's transaction services unit, which moves $3 trillion around the world daily for companies, banks and national governments, received scant attention from competitors and investors for years.
It has done wonders for Citigroup: About a third of its profits since the financial crisis have come from the unit. Best of all, the business used little capital at a time when the bank - which required three rescues during the credit crunch - had little to spare.
But there are early signs that rivals are eroding some of Citi's profits. In the treasury and trade part of the business, which is most directly comparable to other big banks' business lines, Citigroup's revenue fell 5% in the first quarter from the same quarter last year, while Bank of America's dropped 3% and JPMorgan's slipped a fraction of a percent.
Competitors don't disclose profit for their units, but Citigroup's pretax income for transaction services fell 8% in the first quarter, one of the biggest drops since the financial crisis.
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