We all recall the recent boasting by Citi, B of A and JP Morgan that earnings in Jan and Feb were positive and the subsequent backpedaling that occurred regarding March.  Euromoney is questioning whether the banks can deliver on these new raised expectations. They document that investment banking fee revenues have supplied some profits, but that the trend is down, globally. The other three main lines of business are also down:

“In other business lines, revenue has collapsed. Banks made just $679 million in net revenues from syndicated loans in the first three months of 2009, down from $1.5 billion in the fourth quarter of 2008 and $2.8 billion in the third quarter and just one-eighth as much as in the high-water-mark second quarter of 2007.

Revenue from M&A in the first quarter of 2009 was running at just above half the rate of that in the fourth quarter of 2008, down from $4.5 billion to $2.6 billion in the first quarter to March 27. Quarterly revenues from M&A had run above $5 billion for the first three quarters of 2008, having peaked at above $8 billion in the last quarter of 2007.

ECM revenue has not been as robust as one might have hoped, dropping to $1.8 billion with two days to go until the end of the first quarter from $2.6 billion in the final quarter of 2008 and at barely half the rate of $3.7 billion in the first quarter of 2008. ECM revenues’ most recent peak was in the final quarter of 2007 at $6.9billion.

Put the four business lines together and total revenue for the year to March 27 is $9.2 billion, compared with $10.7 billion for the prior final quarter of 2008, $15.4 billion for the comparable first quarter of 2008 and $26 billion in the record second quarter of 2007.

Oddly, as March drew to a close, at the end of a month in which Vikram Pandit had talked up Citi’s capital strength and earnings capacity, the bank’s own credit analysts delivered a warning: don’t lose sight of the downside.  “In our opinion, investors are simply too optimistic about the earnings of the financials and may be disappointed if their expectations are not met. Although the earnings from continuing operations might provide some boost, we are afraid that potential additional write-downs could more than offset this”. “

The next 2 weeks of first quarter earnings reports will truly be interesting for followers of many companies, but for the banks, are we in for a disappointment?