Citigroup profit jumps 40% with higher investment banking, services and wealth revenue — SkimNews
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- Citigroup Q3 profit rose 40% YoY to $5.25B ($2.85/share) from $3.8B ($1.86/share) a year earlier, but net income fell 10% versus Q2 and shares dropped about 1.4% in premarket trading.
- Citigroup investment banking revenue climbed 9% YoY to $1.35B but fell 13% from Q2 as equity and debt underwriting activity slowed late in the quarter, with global investment banking revenue exceeding $90B in the first nine months.
- Citigroup trading revenue rose 6% YoY to $6.11B but fell 13% sequentially, with equities up 14% and fixed-income up 4%, even as U.S. bond yields hit multi-decade highs in September.
- Citigroup's services segment led growth with 15% revenue gain and 27% profit jump, while wealth management posted 15% revenue growth and a matching 15% increase in client assets.
- Citigroup credit cards profit fell 8% YoY despite 13% higher client spending and 9% higher loan volumes, weighed down by higher reward costs and $1.9B in U.S. consumer card loss provisions.
- CEO Jane Fraser said Q3 ROTCE of 11.5% and YTD ROTCE of 12.6% put Citi ahead of its 11% target, with a stated path toward 14-15% sustainable returns even as investments are pulled forward.
- Citigroup returned $4.1B to shareholders in Q3 (including $13.3B in YTD buybacks) and is finalizing its multiyear restructuring, with the Banamex unit in Mexico slated to be taken off the balance sheet and listed on a stock exchange next year.
Why it matters: Citigroup beat its 11% ROTCE target, posting 12.6% year-to-date, which strengthens CEO Jane Fraser's case that the multiyear restructuring is paying off — but the 10% sequential drop in net income, the 13% pullback in trading and underwriting from Q2, and the 1.4% premarket share slide show the market is pricing in the bond-yield drag on capital markets, not the headline 40% YoY gain.
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