Citigroup Third-Quarter Profit Tops Expectations -- 2nd Update
October 15 2019 - 1:37PM
Dow Jones News
By David Benoit and Ben Eisen
Citigroup Inc. on Tuesday said its third-quarter profit rose 6%
and beat expectations.
The New York bank posted a net income of $4.91 billion, or $2.07
a share, compared with $4.62 billion, or $1.73 a share, a year
earlier. Analysts had expected $1.95 per share, according to
FactSet.
Revenue rose to $18.57 billion from $18.39 billion a year
earlier. Analysts had expected $18.54 billion.
The consumer operations posted revenue of $8.66 billion and
profit rose to $1.58 billion. The corporate bank's revenue climbed
to $9.51 billion and its profit increased to $3.16 billion.
The bank hit a key promise by getting its return on tangible
common equity to 12.2% for the quarter and up to 12% for the whole
year. Analysts had raised some questions about whether it would hit
the 12% mark this year.
Chief Executive Michael Corbat would face pressure to deliver on
this as well as return targets for next year. But Citigroup
executives have recently warned that things have changed since they
set the goals in 2017: the global economy looks weaker than they
had hoped, and interest rates are lower than expected.
Expenses ticked up to $10.46 billion. Improving efficiency is
another key part of Mr. Corbat's drive to get those returns
higher.
In the consumer bank, revenue from card offerings rose to $5.17
billion. Revenue in retail banking, which Citigroup has been
expanding, fell 6% to $3.49 billion
In the corporate bank, revenue from Citigroup's core treasury
and trade solutions rose 6% while investment banking revenue rose
4%.
In markets, total trading revenue was down slightly to $3.97
billion. A slowdown in overall activity has dampened Citigroup's
attempt to build up its equities group. Revenue in that portion
fell 4%, and in its larger fixed-income operations revenue was
flat.
Across the company, revenue was roughly flat in North America
and rose 6% in Asia.
Citigroup's stock has been the best performing of the big banks
for the year so far, up 35%, far outpacing rivals in the KBW Nasdaq
bank Index and the broader market as it has steadily pushed profits
higher. Still, unlike most of its rivals, Citigroup's stock trades
below book value, or its net worth. Shares rose 2.1% to $71.72
midday Tuesday.
Write to David Benoit at david.benoit@wsj.com and Ben Eisen at
ben.eisen@wsj.com
(END) Dow Jones Newswires
October 15, 2019 13:22 ET (17:22 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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