51570
Total adjusted revenue fell 4% to $17.76 billion.
Total adjusted revenue fell 4% to $17.76 billion.

Citigroup Profit Down 10.5%

Citigroup Profit Down 10.5%

Citigroup Inc, the fourth-biggest US bank by assets, reported a 10.5% drop in quarterly profit, but beat analysts’ expectations as revenue from investment banking and fixed-income trading rose.
The bank’s net income fell to $3.84 billion, or $1.24 per share, in the third quarter ended Sept. 30 from $4.29 billion, or $1.35 per share, a year earlier. Total adjusted revenue fell 4% to $17.76 billion, Reuters reported.
Analysts on average had estimated earnings of $1.16 per share and revenue of $17.36 billion. Citigroup’s shares rose 1.8% to $49.32 in premarket trading.
Revenue from investment banking rose 15% to $1.09 billion, while revenue from fixed-income trading was up 35% at $3.47 billion.
However, equity markets revenue fell about 34% due to lower market activity.
In the year-earlier quarter, the bank recorded a gain of $180 million on the sale of a business in Mexico and a $140 million valuation adjustment in its equity markets division.
Citigroup has been exiting less-profitable operations in markets around the world, consolidating back offices and cutting jobs to become leaner.
Adjusted revenue from Citicorp, the bank’s core business, rose 0.6% to $16.88 billion, while expenses rose 3% to $9.58 billion.
Earlier, Wells Fargo & Co. reported a 3.7% fall in quarterly profit.
Citigroup said operating expenses fell 2.5% to $10.40 billion.
“In the quarter, both our Global Consumer Bank and Institutional Clients group had solid year-over-year revenue increases in nearly every business line and geography,” CEO Michael Corbat said in a statement.
The lender said its return on tangible common equity, a key measure of profitability, fell to 7.8% from 8.9% a year earlier.
Corbat set a target of reaching a 10% return on equity by 2015 shortly after taking the helm in 2012.
But the bank has found it hard to hit the target as its earnings are squeezed by low interest rates and the US Federal Reserve’s requirement that banks retain more capital. The lender said revenue from its North American branded card business rose 15% to $2.2 billion, reflecting the addition of the Costco portfolio as well as modest organic growth driven by higher volumes.
The business accounts for about a quarter of its total net income and a third of profit from its global consumer franchises.
Citigroup executives have said the branded card business is expected to generate a 2.3% return on assets, more than double the profitability of the entire company.

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