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Citi Shuts Dark Pool Platform Post Equities Unit Review

Zacks Equity Research

Per a Reuters article, Citigroup C has closed one of its private stock trading unit following an extensive review conducted on its equities business. Citigroup Global Markets' CitiCross alternative trading system ceased to operate from April-end, per a SEC filing.

Launched in 2012, Citi aimed to enhance access to liquidity for a wide range of equity market participants through its dark pool platform.The bank still conducts private trades through another platform, CitiBLOC.

Reuters quoted Citi’s spokesman Scott Helfman, "We have decided to shut down the CitiCross ATS as part of a strategic review of our equities business. We continue to invest in talent and technology to drive wallet share growth in global equities."

In first-quarter 2019, Citi’s equity trading revenues declined 24% on account of lower market volumes.

Changing regulatory and compliance needs have increased related costs for private trading venues compared to the past, when the same were subject to lesser regulations than traditional public stock exchanges.

Citi is focused on tapping opportunities in growing regions, and continues to retreat from unprofitable markets.

In March, the bank entered the booming digital payments industry by offering merchants a range of digital payment collection modes such as cards, e-wallets and other innovative bank transfers. The company will be using Mastercard’s Payment Gateway Services, thereby enabling institutional clients to accept global payments.

Thus, we believe that the company is well poised to address its internal inefficiencies and setbacks. However, muted fee income growth and persistent legal hassles pose concerns.

Over the past six months, the stock has gained 3.9%, outperforming 1.3% growth recorded by the industry.

Currently, Citi carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stock to Consider 

1st Source Corporation SRCE has witnessed slight upward estimate revisions for current-year earnings over the past 30 days. Over the past three months, the company’s share price has been up 6%. It currently carries a Zacks Rank of 2 (Buy).

Macatawa Bank Corporation MCBC estimates have been revised 3.7% upward for current-year earnings over the past 30 days. Also, the company’s shares have risen nearly 7.6% in the past three months. It carries a Zacks Rank #2.

The Zacks Consensus Estimate for Community Bank System’s CBU current-year earnings has been revised 1.9% upward over the past 60 days. Also, the company’s shares have risen nearly 10% in the past three months. It currently carries a Zacks Rank of 2.

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