Costs help Cit­i­group beat Wall Street ex­pec­ta­tions

The Globe and Mail (BC Edition) - - INTERNATIONAL - DAVID HENRY SWETA SINGH

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

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