Citigroup Q3 Profit Up 8%, Results Beat View

Citigroup Q3 Profit Up 8%, Results Beat View

Executives at the largest USA bank touted the diverse mix of businesses that allow JPMorgan to weather a dip in one area or another, and downplayed a 27 percent drop in bond trading revenue even though weakness has continued into the fourth quarter. Citi's institutional client group, which contains its trading desks and investment bank, had net income of $3.04 billion compared with $2.64 billion in the same period a year earlier. Analysts were expecting the company to report earnings per share of $1.32 on revenue of $17.90 billion for the quarter. Analysts had, on average, estimated earnings per share of $1.32, according to Thomson Reuters I/B/E/S. Citi reported a 3% year-on-year rise in global consumer banking revenue, while in North America retail banking jumped by 12%, excluding mortgages. However, that decline was offset by a 16% increase in equity trading revenue.

FILE PHOTO: A view of the exterior of the Citibank Corporate headquarters in the Manhattan borough of New York City, May 20, 2015.

The first two of the big banks reported earnings on Thursday morning, and all of the major banks are rising following the reports.

Citigroup Inc shares fell $0.34 (-0.45%) in premarket trading Thursday.

Excluding the gain, net income declined 2 percent, reflecting higher cost of credit.

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The main growth driver in the quarter was the global consumer business.

Global Consumer Banking revenues increased 3 percent to $8.43 billion, while Corporate/Other revenue fell 55 percent from previous year to $509 million.

Corbat told analysts the uptick in provisions were a normal part of the credit cycle and did not point to evidence of consumers under stress. The branded cards business has seen loss rates rise as some customers who the bank has added in recent years during a growth push have missed payments.

Citigroup's cost of credit rose 15 percent from a year ago to $1.99 billion, driven by an increase in net credit losses of $252 million and higher loan loss reserve build of $16 million that included about $100 million of hurricane and earthquake-related loan loss reserve builds.

Hopes are fading that U.S. President Donald Trump will be able to stimulate bond trading activity and boost demand for loans through a yet-to-materialize tax overhaul and loosening in financial regulations.

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