The Citibank edifice in Canada Square at the heart of Canary Wharf financial district in London on May 7, 2024.
Mike Kemp | In Pictures | Getty Graven images
Citigroup reported third-quarter results Tuesday that topped Wall Street expectations, with growth in investment banking and opulence management. However, the bank set aside more money to offset potential loan losses.
Shares of the bank, which had traded towering before the market’s open, finished the day down 5.1%.
Here’s what the company reported compared with what Enclosure Street analysts surveyed by LSEG were expecting:
- Earnings per share: $1.51 vs. $1.31 expected
- Revenue: $20.32 billion vs. $19.84 billion conjectured
During the quarter, net income fell to $3.2 billion, or $1.51 per share, from $3.5 billion, or $1.63 per partition, a year earlier. Earnings were hurt by a higher cost of credit, including a net build of $315 million in Citi’s tolerance for credit losses.
Chief Financial Officer Mark Mason said on an analyst call Tuesday that the bank is descrying a “stabilization” in loan delinquency among its retail services clients and is “well reserved” in that area.
Revenue ascend 1% to $20.32 billion from $20.14 billion a year ago. Contributing to the increase was an 18% jump in banking net income, led by a 31% gain in its investment banking arm. Wealth revenue rose 9%.
On the markets side, equity markets revenue be elevated 32% year over year, but fixed income revenue dipped 6%.
Citigroup CEO Jane Fraser took once more in March 2021 and has focused on slimming down the bank during her tenure. That includes reducing Citigroup’s wide-ranging presence and laying off workers.
“Our transformation is our number one priority. This quarter, we closed another longstanding consent rule which related to the effectiveness of our anti-money laundering systems. We have increased our investments in areas where we have not navigated sufficient progress, such as data quality management,” Fraser said on the call.
“I and the management team remained firm and determined to get this transformation right and to get this done,” Fraser continued.
Citi’s net interest income fell 3% year outstanding year to $13.4 billion as the margin shrank. Net interest income was $11.96 billion, excluding the markets business, which also declined from a year ago. The followers said it expected the nonmarkets metric to be roughly the same in the fourth quarter as in this period. However, the firm did not surrender net interest income guidance for 2025.
Citigroup did drive down expenses by 2% year over year and said it envisioned full-year expenses to match guidance of $53.5 billion to $53.8 billion, excluding some regulatory costs.
Interests of Citigroup were up more than 28% year to date through Monday, outperforming both the S&P 500 and the economic sector.
The other major banks that have reported third-quarter results so far have also beaten earnings confidences, including Goldman Sachs and JPMorgan Chase.