Economy

Investment banking gains drives Citi's quarterly results

Citigroup Inc. (NYSE: C) reported its third-quarter financial results before the markets opened on Thursday. Per-share earnings were $1.42.

"We had revenue increases in numerous products we have been investing in, tightly managed our expenses, and again saw loan growth in both our consumer and institutional businesses", Citigroup chief executive Michael Corbat said.

Revenues also topped Street forecasts, coming in at US$18.17bn versus the US$17.90bn which had initially been pencilled in. "We had revenue increases in numerous products we have been investing in, tightly managed our expenses, and again saw loan growth in both our consumer and institutional businesses".

Citigroup said it earned $4.13 billion, or $1.42 per share, compared with a profit of $3.84 billion, or $1.24 per share, in the same period a year earlier.

On a sour note, Citi said net credit losses surged 17% year-over-year to $1.77 billion, due to integration of COST credit card portfolio.

As expected, fixed-income trading took a 16% hit year-over-year, dropping to $2.9 billion from $3.4 billion.

At the end of the quarter, loans totaled $653 billion, an increase of 2% from past year.

While Citi's trading desks focus heavily on bond and currency trading, it was the bank's other trading desks that stood out. Bank of America, Citi, and JPMorgan have been bracing for 15% and 20% hits to trading revenues. The bank saw more underwriting of stock and bond offerings by companies as well as more fees for advisory services.

Expenses at the bank were $10.17 billion, 2 percent lower than previous year.

Within ICG, Banking revenues jumped 16% to $4.6bn, helped in part by hedges on loans and a 14% rise in investment banking income to $1.2bn - with equity underwriting making a "particularly" solid contribution.

Quarterly consumer banking revenue increased 3% globally from a year ago, to $8.43 billion, led by a 10% gain in Mexico. The unit's growth was driven by a strong equity markets showing, where revenues increased 16% to $757 million thanks to healthy business from cash equities, derivatives, and prime finance.

Citi has beaten its EPS estimates every quarter since the start of 2014.



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