Citigroup slides despite better-than-expected third quarter numbers

Andrew Cummings
October 13, 2017

J.P Morgan Chase and Citigroup reported slightly higher profits Thursday due to increased lending and higher interest rates, opening third-quarter reporting season on a solid note. JPMorgan, the biggest U.S. bank by assets, reported $6.7 billion in profits for the quarter ending September 30, up seven percent from the year-ago period.

Citi delivered earnings per share for the three months ended September 30 of US$1.42 - US$0.10 higher than analysts polled by Thomson Reuters had expected.

Citigroup's investment bank was the driver of the bank's profit growth in the quarter, despite a notable drop in bond trading revenue.

Investment banking revenues jumped 14% from last year to $1.23 billion, with every division in the Institutional Clients Group seeing healthy growth from last year except fixed-income trading, a line of business that has been slumping across Wall Street.

"We had revenue increases in numerous products we have been investing in, tightly managed our expenses, and again saw loan growth in both our consumer and institutional businesses", Citigroup chief executive Michael Corbat said.

As Business Insider reports, most of the investment banking unit's businesses "benefit from the company's trading floors in almost 80 markets and giant clients that require Citi's services on a daily basis". The bank saw more underwriting of stock and bond offerings by companies as well as more fees for advisory services.

The bank's worldwide consumer business saw an 8% rise in revenue, driven by higher loans and deposit volumes growth, Citi said.

The biggest banks in America are setting aside more money than in the past four years as they prepare for more bad-loan write-offs.

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.

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