Citigroup Stock Rises. Earnings Get Lift From Strong Equities Trading.
was rising in premarket trading Thursday after the bank reported third-quarter earnings that topped analysts’ expectations.
(ticker: C) reported an adjusted profit of $2.15 a share on revenues of $17.2 billion, beating forecasts for $1.71 a share on revenues of $16.9 billion.
Boosting profits was a $1.16 billion release of loan loss provisions as economic conditions improved.
The bank reported earnings of $1.40 a share a year earlier on revenues of $17.3 billion.
Net income was $4.6 billion, up from $3.1 billion in the year-ago quarter.
Shares of Citigroup advanced 1.4% to $71.23.
“Overall, I am quite pleased with $4.6 billion in net income given the environment we are operating in,” said CEO Jane Fraser in a statement. “While we have much work ahead, we are getting results from the investments we have been making and seeing both the strength and durability of our franchise.”
Citigroup saw better-than-anticipated growth from its Institutional Clients Group, which raked in $10.8 billion—a 4% year-over-year increase. Growth was especially strong in investment banking, equity markets and securities services. Investment banking revenue increased by nearly 40% to $1.9 billion, up from $1.3 billion last year.
Citigroup saw declines in its trading activity. Total revenue in the trading division came in at $5 billion, marking a 4% year-over-year decrease. Fixed income trading saw a 16% drop, which the bank said was due to lower rates and spread products.
Equities trading increased by 40% to generate $1.2 billion in revenues, driven by derivatives, prime finance and cash equities.
Overall operating costs increased by 5%, driven by increased investments in Citi’s pivot toward business-led investments such as wealth management, treasury and trade, and its commercial bank.
The bank’s global consumer banking unit saw an 8% drop in revenue, bringing in $6.2 billion. The bank attributed the drop to the sale of its Australia consumer business, which created a pretax loss of approximately $680 million.
Citigroup previously announced it would pursue exits from consumer franchises in 13 markets in Asia and EMEA and focus instead on scaling in four wealth centers: Singapore, Hong Kong, the UAE, and London.
Three other major banks reported earnings Thursday, including
Bank of America
(MS). JPMorgan Chase (JPM) reported earnings Wednesday.
Write to Sabrina Escobar at [email protected]