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Citigroup profit beats on strength in consumer banking, equity trading


By and David Henry

(Reuters) - Inc reported a higher-than-expected quarterly profit on Friday, driven by strength in its business and a surge in equities trading.

Global revenue increased 7 percent on gains in North America, and Equity markets revenue jumped 38 percent, gaining from increased volatility in the quarter.

But weakness in the lender's business was a sore point for investors. Citi's stock was down nearly 3 percent in afternoon trade as the reported a 10 percent drop in revenue from the business.

Larger rival & Co's quarterly profit was also dented by a 7 decline in revenue.

"There were a lot of deals announced, but there were not a lot of deals closed on a year-over-year basis," said Art Hogan, at in

"I think that's going to impact all of those involved in investment banking, included."

Still, Citi's net income rose 13 percent in the first quarter. On a per share basis, earned $1.68, topping analysts' average estimate of $1.61, according to I/B/E/S.

"Good quarter for as they continue to show progress in their return of & return on capital mantra," wrote in a note to clients.

The results benefited from a busy trading desk as volatility rocked global markets amid inflation fears and heightened trade tensions, in contrast to a calm 2017.

Total revenue rose about 3 percent to $18.87 billion, while operating expenses rose 2 percent to $10.92 billion.

The rise in equity markets revenue offset a 7 percent drop in Citi's bigger fixed income trading business. Combined, the two were up 1 percent.

revenue fell to $1.13 billion from $1.29 billion and blamed "declines in the overall market wallet and the timing of episodic deal activity."

Return on tangible common equity, a measure of profitability, reached 11.4 percent in part to the company having had to mark down its equity value in the fourth quarter because of the

said in January it expected return on common tangible equity at 10.5 percent for the full year.

Shares of the fourth largest U.S. by assets were down 2.8 percent at $70.10. They have gained 23 percent in the last 12 months.

(Reporting by in Bengaluru and in New York; Editing by Saumyadeb Chakrabarty)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, April 13 2018. 22:16 IST