Costs help Citigroup beat Wall Street expectations
Citigroup Inc.’s quarterly earnings beat Wall Street expectations on Thursday as cost-cutting, a unit sale and a gain in investment bank fees compensated for weak bond trading and a jump in provisions for consumer bad debts.
Chief executive Michael Corbat has pledged to increase profit from consumer lending to stock trading, and return tens of billions of dollars to shareholders after finally putting the United States’ fourth-largest bank on a stable path following the 2007-09 financial crisis.
But hopes U.S. President Donald Trump would stimulate trading activity and greater economic demand through tax reforms and a loosening in financial regulations have failed to materialize.
Citigroup reported a 7.6-percent increase in net income in the third quarter. Earnings per share rose about 15 per cent to $1.42 (U.S.), bolstered by the bank’s move to reduce its shares outstanding by 7 per cent. Analysts had, on average, estimated earnings per share of $1.32, according to Thomson Reuters I/B/E/S.
Expenses dropped 2 per cent. Total revenue, meanwhile, rose about 2 per cent to $18.17-billion, topping expectations of $17.90billion helped in part by an increase in fees earned on share sales at Citi’s investment bank and a jump in equity trading.
Over all, however, trading dropped 11 per cent, dragged under by Citi’s large fixed-income division. Citigroup (C)
Close: $72.37 (U.S.), down $2.57