Citi Third-Quarter Results Beat Market Expectations

Revenues, however, barely changed on a year-on-year basis.

Citigroup Inc. has published its third-quarter profits on Friday, coming in above market expectations. The firm’s results were supported by higher bond trading revenue and solid results from its consumer banking business in Mexico.

Taking a look first at net income, the firm reported a figure of $4.6 billion for the third quarter of 2018. This is up 10 percent from the same time period in 2017, which had a net income of $4.1 billion. This result translates to $1.73 per diluted share which is also up from last year, which stood at $1.42.

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In the third quarter, revenue remained relatively unchanged on a year-on-year basis, coming in at $18.4 billion. This is primarily due to the net impact of a gain on its sale of a fixed income analytics business (worth around $580 million) in 2017. The result is also due to gains made on a sale worth about $250 million of an asset management business in Mexico in the current period.

Fixed Income and Trading Revenues Record Slight Increases at Citi

Back in September, Citi warned that its total fixed income and trading revenue would likely be flat, or only slightly higher in this quarter. However, when compared to Q3 of 2017 fixed income market revenues managed to increase by nine percent during the third quarter of 2018, hitting $3.2 billion. According to the report, this growth was largely due to contributions from both rates and currencies as well as spread products.

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Equity Markets revenues managed to record an ever so slight increase of one percent year-on-year at $792 million. Despite strength in prime finance and derivatives, the sector was dragged down by lower revenues in cash equities. This was the result of a more challenging trading environment which equaled lower commissions.

Securities Services, on the other hand, enjoyed a year-on-year increase of 11 percent. This was thanks to continued growth in Citi’s client volumes and higher net interest revenue.

Commenting on the results, Citi CEO Michael Corbat said: “our results this quarter showed solid year-over-year revenue growth across many of our businesses, including Fixed Income, Treasury and Trade Solutions, Securities Services, the Private Bank and our consumer franchise in Mexico.”

“We also grew loans and deposits while continuing to prudently manage risk as demonstrated by the stability of our credit portfolio. We returned $6.4 billion of capital to common shareholders through buybacks and dividends during the quarter. And over the past twelve months, we’ve reduced our common shares outstanding by over 200 million or 8%. Through a combination of earnings growth and capital return, our earnings per share were 22% higher than one year ago.”

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