The Citibank building in Canada Square at the heart of Canary Wharf financial district in London on May 7, 2024.
Mike Kemp | In Pictures | Getty Images
Citigroup reported third-quarter results Tuesday that topped Wall Street expectations, with growth in investment banking and wealth management. However, the bank set aside more money to offset potential loan losses.
Shares of the bank, which had traded higher before the market’s open, were recently down 1.6%.
Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:
- Earnings per share: $1.51 vs. $1.31 expected
- Revenue: $20.32 billion vs. $19.84 billion expected
Citigroup’s banking division reported 18% gain in revenue year over year, led by a 31% gain in its investment banking arm. Wealth revenue rose 9%.
Net income fell to $3.2 billion, or $1.51 per share, from $3.5 billion, or $1.63 per share, a year earlier. Earnings were hurt by a higher cost of credit, including a net build of $315 million in Citi’s allowance for credit losses.
Revenue rose 1% to $20.32 billion from $20.14 billion a year ago.
On the markets side, equity markets revenue rose 32% year over year, but fixed income revenue dipped 6%.
Citigroup CEO Jane Fraser took over in March 2021 and has focused on slimming down the bank during her tenure. That includes reducing Citigroup’s global presence and laying off workers. Investors will be looking for updates on Fraser’s turnaround plan during the analyst call later Tuesday morning.
“This quarter contains multiple proof points that we are moving in the right direction and that our strategy is gaining traction, including positive operating leverage for each of our businesses, share gains and fee growth,” Fraser said in the earnings release.
Citi’s net interest income fell 3% year over year to $13.4 billion as the margin shrank. Net interest income was $11.96 billion excluding the markets business, which was also a decline from a year ago. Citi said it expected the non-markets metric to be roughly the same in the fourth quarter as in this period.
Citigroup did drive down expenses by 2% year over year and said it expected full-year expenses to match guidance of $53.5 billion to $53.8 billion, excluding some regulatory costs.
Shares of Citigroup were up more than 28% year to date through Monday, outperforming both the S&P 500 and the financial sector.
The other major banks that have reported third-quarter results so far have also beaten earnings expectations, including Goldman Sachs and JPMorgan Chase.