Published: Fri, October 13, 2017
Money | By Armando Alvarado

Citigroup Q3 Profit Up 8%, Results Beat View

Citigroup Q3 Profit Up 8%, Results Beat View

Wall Street banks have seen major declines in bond trading activity, which was boosted past year on global macroeconomic uncertainty, especially around Brexit and the US presidential election.

Both JP Morgan Chase and Citigroup reported higher third quarter profits, despite being hit by a drop in bond trading revenues. At $1.76 per diluted share, earnings beat the consensus estimate of Wall Street analysts of $1.65 a share.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.32 per share.

JPMorgan fared worse last quarter than rival Citi, which reported a 16 percent decline in bond trading.

Citi shares were down 3 percent and JPMorgan was off 0.8 percent in afternoon trade.

Citigroup's stock has risen 26% this year, by far the best among the U.S.'s six biggest banks, thanks in part to the announcement of a plan to return $60 billion in capital through 2020.

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Citigroup Inc shares fell $0.34 (-0.45%) in premarket trading Thursday.

The increase in revenues were driven by growth in both the Institutional Clients Group and Global Consumer Banking segments, partially offset by lower revenues in Corporate/Other segment primarily due to the continued wind-down of legacy costs. JPMorgan's net interest income, or the difference between what it pays for funds and collects from lending them out, rose 10 percent.

Global Consumer Banking revenues increased 3 percent to $8.43 billion, while Corporate/Other revenue fell 55 percent from past year to $509 million.

Citigroup this year has been ratcheting up its expectations for soured loans for its two North American credit card businesses, Citi-branded cards and cards issued for stores. The branded cards business has seen loss rates rise as some customers who the bank has added in recent years during a growth push have missed payments.

The bank's profit was $4.13 billion, up 8% from $3.84 billion a year ago.

Hopes are fading that U.S. President Donald Trump will be able to stimulate bond trading activity and boost demand for loans through a yet-to-materialize tax overhaul and loosening in financial regulations.

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