By tf-lawyer.com In light of the growth in its investment banking division, Citigroup reported a smaller-than-expected decline in profits for the third quarter.
As corporate clients continue to issue more debt and stocks, this major U.S. bank is benefiting alongside competitors JPMorgan Chase and Wells Fargo from a rebound in the capital markets.
For the second consecutive quarter, the investment banking sector was a standout performer, with revenues surging 31% to $934 million. Wall Street executives are optimistic that last month’s interest rate cuts by the Federal Reserve will pave the way for more transactions and initial public offerings.
Total operating expenses decreased by 2% in the third quarter.
By the end of the quarter, Citigroup’s allowance for credit losses rose to approximately $22.1 billion, compared to $20.2 billion a year earlier. This increase led to net income falling to $3.2 billion, or $1.51 per share, down from $3.5 billion, or $1.63 per share, in the same period last year. However, this still comfortably exceeded analysts’ average expectations of $1.31 per share, according to LSEG estimates.
Driven by a 24% increase in securities services revenue, which reached $1.4 billion, total service revenues grew by 8% to $5 billion.
The rising stock market propelled equity trading revenue up 32% to $1.2 billion, contributing to an overall market revenue increase of 1%.
On the other hand, bond trading revenues fell short, declining by 6% to $3.6 billion.
In the U.S. retail banking sector, revenues grew 3% to $5 billion, bolstered by an 8% increase in credit card income to $2.7 billion.
Meanwhile, retail banking income saw an 8% drop, and revenue from the retail services sector, which handles credit card partnerships, decreased by 1%.
Citigroup’s wealth management division remains a critical part of CEO Jane Fraser’s growth strategy, with quarterly revenues increasing by 9% to $2 billion.
