The Citibank building in Canada Square in the heart of the Canary Wharf financial district in London on May 7, 2024.
Mike Kemp | In pictures | Getty Images
Citigroup reported third-quarter results on Tuesday that beat Wall Street expectations, with growth in investment banking and wealth management. However, the bank made more money available to cover possible loan defaults.
The bank's shares, which were trading higher before the market opened, were last down 1.6%.
Here's what the company reported compared to the expectations of Wall Street analysts surveyed by LSEG:
- Earnings per share: $1.51 versus expected $1.31
- Revenue: $20.32 billion versus expected $19.84 billion
Citigroup's banking division reported an 18% year-over-year increase in revenue, led by a 31% increase in its investment banking division. Property income increased by 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. The result was hurt by higher borrowing costs, including a net increase in Citi's loan loss provision of $315 million.
Revenue rose 1% to $20.32 billion from $20.14 billion a year ago.
On the market side, equity market revenues increased 32% year-on-year, while fixed income revenues declined 6%.
Citigroup CEO Jane Fraser took over in March 2021 and has focused on streamlining the bank during her tenure. This includes reducing Citigroup's global footprint and laying off workers. Investors will be watching for updates on Fraser's turnaround plan during the analyst conference later Tuesday morning.
“This quarter contains multiple evidence that we are moving in the right direction and that our strategy is gaining momentum, 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 its margin shrank. Net interest income, excluding market operations, was $11.96 billion, also down year over year. The company said it expects non-market metrics in the fourth quarter to be approximately the same as this period.
Citigroup cut spending 2% from a year ago and said it expected full-year spending to be in line with guidance of $53.5 billion to $53.8 billion, excluding some regulatory costs.
Citigroup shares 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 also beat earnings expectations, including Goldman Sachs and JPMorgan Chase.