The bank’s net income tumbled 36% to US$2.92 billion, or US$1.33 per share, in the three months to June 30.

In markets, “clients stood on the sidelines in April while the debt ceiling played out”, CEO Jane Fraser said in a statement.

Meanwhile, “the long-awaited rebound in investment banking has yet to materialise, making for a disappointing quarter”.

The drop in Citi’s net income contrasted with a 67% jump posted by JPMorgan as it earned more from interest payments and also benefited from the purchase of First Republic Bank and a 57% rise at Wells Fargo.

Meanwhile, net interest income jumped 18% at the most global US lender, mirroring 44% and 29% gains recorded by JPMorgan Chase and Wells Fargo.

The results come amid rising expectations that the Federal Reserve’s hefty rate hikes that have boosted profits at big US banks in the past few quarters may be nearing an end.

Citigroup raised its guidance for net interest income for the full year to US$46 billion from US$45 billion.

“The US economy is proving to be quite resilient with strong balance sheets both on the consumer side and the corporate side,” CFO Mark Mason said told reporters on a conference call.

Delinquency rates in credit cards and other retail lines are rising and expected to reach “normal levels” by the end of the year, he said.

Revenue for retail services jumped 27%, while branded cards increased 8%.

Citi posted a 15% growth each in revenues from its services unit, as well as treasury and trade solutions (TTS), a business executives have described as the company’s crown jewel.

The strong performance cushioned a 13% decline in the bank’s markets revenue to US$4.6 billion, and a 24% plunge in investment banking fees to US$612 million.

Excluding one-off items, Citi earned US$1.37 per share, topping US$1.30 expected by analysts, according to Refinitiv IBES data.

Shares of the New York-based lender were volatile in early morning trading, last down 1.6%.

It lagged JPMorgan and Wells Fargo, which rose more than 1% and 2%, respectively.