Citigroup on Monday posted a 15 percent decline in quarterly trading revenue from the same period last year, better than the 20 to 25 percent decline Chief Financial Officer John Gerspach forecast at a conference in May.

Bond trading volume in June was higher than in April and May, Gerspach said on a conference call with analysts on Monday. It accounted for over four-fifths of total trading revenue and was 14 percent higher than forecast by Morgan Stanley analysts.

"Several events transpired at the end of May, beginning of June, that had a calming influence on the market," including a relief rally following the easing of tensions between Russia and Ukraine, Gerspach said.

Most of June's strong performance was tied to "spread" products, such as corporate bonds or mortgage-backed securities, where revenues were up 30 percent compared with the second quarter of 2013, Gerspach said.

In contrast, revenues for trading government bonds, foreign exchange and other rate and currency products were down around 30 percent in the same period, he added.

The banks that are likely to benefit most are those with big businesses in products such as corporate and mortgage bonds. Bank of America, JPMorgan Chase and Goldman Sachs, which are due to report quarterly earnings later this week, all hold either a no. 1 or no. 2 position in industry rankings for trading credit and securitized products in 2013, according to data provider Coalition Analytics.

Morgan Stanley would see a smaller benefit because it is less exposed, focusing instead more on areas that include commodities and equities, according to Coalition data.

"The people more heavily geared towards spread products should be relative out-performers," said Steven Chubak, an analyst at Nomura Securities.

Representatives from Bank of America, Morgan Stanley and JPMorgan declined to comment, and Goldman Sachs did not immediately respond to requests seeking comment.

Even if trading results are not as bad as investors feared, banks will still struggle to boost profits in the business.

"It continues to be a difficult environment for intermediaries to operate in," said Anthony Perrotta, the head of fixed income research at TABB Group.

(Reporting by Peter Rudegeair. Editing by Andre Grenon)

By Peter Rudegeair