Citigroup beat Wall Street estimates for third-quarter profit, helped by investment banking, transactions with multinational companies and wealth management. Trading revenue fell against the previous quarter and credit card profit declined from a year earlier.
Citigroup beat Wall Street estimates for third-quarter profit on Tuesday. The results were helped by stronger investment banking revenue, transactions with multinational companies and higher earnings from wealth management.
Citi reported a profit of $2.85 per share, compared with analysts' average estimate of $2.66 per share, according to LSEG data. Profit rose to $5.25 billion from $3.8 billion a year earlier, although net income was 10% lower than in the second quarter.
Services and wealth lead growth
Services posted the highest growth among Citi's five businesses, with revenue up 15% and profit up 27%. Wealth management also grew revenue by 15% and increased client assets by the same percentage.
Investment banking revenue increased 9% from a year ago to $1.35 billion but fell 13% from the previous quarter as equity and debt underwriting slowed. CFO Gonzalo Luchetti said the bank gained market share over the last year while also going through the industry slowdown that followed record deal volume in the first half.
Trading dips from Q2, cards decline
Trading revenue rose 6% from a year ago to $6.11 billion, but it was 13% lower than in the second quarter. Equities trading revenue rose 14%, and fixed-income trading revenue was up 4%.
Credit cards also weighed on results. Citi's card profit fell 8% from a year earlier because of higher reward costs, payments to partners and credit provisions.
Volatile backdrop for banks
Wall Street banks are working through a volatile market. According to Reuters, the conflict in Iran pushed oil prices higher, fueling inflation and prompting the US Federal Reserve to raise interest rates.
Citi returned $4.1 billion to shareholders through buybacks and dividends in the third quarter. Its shares were down 0.4% in early trading after the results, though they have risen 13% this year.
Source: Investing.com (Reuters)
Trading involves risk.
Risk Disclaimer
