Consumer banking powers Citigroup's profit beat
Reuters
Published Oct 15, 2019 09:38AM ET
Consumer banking powers Citigroup's profit beat
(Reuters) - Citigroup Inc (N:C) beat analysts' estimates for quarterly revenue and profit on Tuesday, as growth in its consumer banking business tempered weakness in trading.
Citi, the most global of the U.S. banks, said revenue in its consumer unit rose 4% excluding the impact of currency fluctuations, outpacing its institutional clients business where revenue grew 3%.
Consumer business was padded by more U.S. credit card customers beginning to pay interest as promotional periods wore off. North America branded card revenue jumped 11% in the third quarter. Expenses in the consumer business fell 2%.
Trading revenue fell 1% as a decline in equities offset stable revenue in fixed-income trading. JPMorgan Chase & Co (N:JPM) and Goldman Sachs Group Inc (N:GS) both reported a rise in revenue from bond trading.
Citi also reached a key efficiency target. The third-largest U.S. bank by assets hit a return on tangible common equity (ROTCE) of 12.2%, above the goal of 12% it has promised investors for the year.
ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.
Citi has been focused on building credibility with investors after missing targets in recent years. Estimates often hovered below the bank's stated goals, indicating Wall Street analysts were skeptical management could reach the targets it had set.
Net income applicable to the bank rose 6% to $4.9 billion, or $2.07 per share, in the third quarter from $4.6 billion, or $1.73 per share, a year earlier.
Excluding a tax benefit, the bank earned $1.97 per share.
Revenue was up about 1% at $18.57 billion.
Analysts were expecting a profit of $1.95 per share and revenue of $18.5 billion, according to IBES data from Refinitiv.
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Written By: Reuters
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