NEW YORK: Citigroup, the fourth-biggest US bank by assets, beat expectations for third-quarter net profit yesterday after trading revenue surged 35 per cent.
The resurgence, which was echoed at rival JPMorgan, is a boost for chief executive Michael Corbat, who has stuck with the bank’s trading business while shrinking large parts of its consumer banking business in overseas markets.
While net income fell 11pc to $3.84 billion, or $1.24 per share, it exceeded the average estimate of $1.16 per share, according to Thomson Reuters I/B/E/S.
Total adjusted revenue fell 4pc to $17.76bn, again beating the average estimate of $17.36bn.
Both JPMorgan and Wells Fargo beat third-quarter profit forecasts yesterday. Bank of America reports results on Monday, followed by Goldman Sachs and Morgan Stanley later next week.
Revenue at Citi’s institutional clients group, which includes trading and investment banking, rose 13pc, boosted by volatility in fixed income markets.
However, equity market revenue fell about 34pc as political uncertainty discouraged companies from initial public offerings and share offers. JPMorgan reported a 1pc increase.
Citi’s global consumer banking division had a less stellar performance. Net income fell by nearly a quarter due to a higher cost of credit and higher operating expenses.
Part of those expenses were due to the cost of becoming the lender behind retailer Costco Wholesale Corporation’s co-branded credit cards this year from American Express Company.
Citigroup said revenue from its North American branded card business grew 15pc to $2.2bn, reflecting the addition of the Costco portfolio as well as modest organic growth driven by higher volumes.
Overall operating expenses fell 2.5pc to $10.4bn.