Citigroup reported a 2% increase in profit, reaching $3.55 billion or $1.63 per share. This surpassed analysts’ expectations who had forecasted earnings of $1.23 per share. The bank also saw a 9% rise in revenue, reaching $20.14 billion, exceeding the expected revenue of $19.27 billion. The growth in revenue was driven by the bank’s markets operations, with total trading revenue increasing by 10% to $4.48 billion. Fixed-income trading experienced a notable 14% surge due to higher client volumes in interest rate and currency trades. However, equities trading revenue declined by 3%.
Citi’s core business, which involves providing banking services to global corporations and facilitating money transfers, experienced a 13% increase in revenue, reaching $4.72 billion. This growth was primarily attributed to higher interest rates. Revenue in the corporate banking division, which includes investment banking fees, mergers and acquisitions, and lending to large companies, rose by 18%. The U.S. consumer bank also performed well, with revenue increasing by 13% to $4.89 billion, driven by higher credit card spending volumes and fees. In contrast, the wealth management operation, which is crucial for Citi’s planned turnaround, saw only a 2% growth in revenue, reaching $1.9 billion.
Although the profitability metric Citi’s investors focus on, return on tangible common equity, fell from 8.2% to 7.7% compared to the previous year, it still performed better than anticipated. The bank’s credit card spending volumes showed an improvement from the previous year, but a decline compared to the second quarter. CFO Mark Mason expressed that the consumer segment has displayed resilience, although customers with lower credit scores and potentially lower income are facing increased pressure. Meanwhile, expenses rose by 6% to $13.5 billion, aligning with expectations. Citigroup is currently undergoing a restructuring that will involve reducing headcount in the upcoming months. Following the positive financial results, Citi’s shares rose approximately 3% early on Friday.
