Citigroup Q3 Profit Up 8%, Results Beat View

Citi ICG performance q3 2017

Citigroup Inc (C) Q3 Earnings Beat, Despite Very Weak Fixed Income Performance

"Don't freak out. It doesn't mean it's going to be 21 months before we see growth in anything", Chief Financial Officer John Gersprach told analysts.

Citigroup's third-quarter net income rose to $4.13 billion or $1.42 per share from $3.84 billion or $1.24 per share in the year-ago period.

Expenses dropped 2 percent.

Firm-wide, Citi had revenues of $18.17 billion in the quarter up from $17.76 billion in the period a year earlier, beating analysts' expectations.

Executives at the largest US 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.

Overall, however, trading dropped 11 percent, dragged under by Citi's large fixed income division.

The latest quarter's results include a gain of $580 million pre-tax, or $355 million after-tax, on the sale of a fixed income analytics business, which contributed $0.13 to earnings per share.

JPMorgan fared worse last quarter than rival Citi, which reported a 16 percent decline in bond trading. He said, in the end, September was better than anticipated.

Citi's shares were down 2 percent in late morning trade, the worst performer among the major US banks.

Shares in Citigroup Inc.

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

FILE PHOTO - Citigroup CEO Michael Corbat (C) chats with Thomson Reuters CEO Jim Smith and his wife Pam Kushmerick at the Thomson Reuters reception prior to the White House Correspondents' Association Gala in Washington, DC, U.S. on April 27, 2013.

Global Consumer Banking revenues increased 3 percent to $8.43 billion, while Corporate/Other revenue fell 55 percent from a year ago to $509 million. JPMorgan also had to set aside more money in the quarter to cover souring credit card loans.

Citi cited "continued growth in loans and assets under management" for the rise, as well as higher interest rates.

Citigroup's cost of credit rose 15 percent from past year 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.

Trading revenue during the fourth quarter of 2016 benefited from a surge in trading activity following the US election.

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