Citigroup has reported a better-than-expected quarterly profit, helped by lower expenses, higher bond trading revenue and strength in its consumer banking business in Mexico.
Net income for the third-largest US bank rose to $4.62bn (€4bn) in the third quarter from $4.13bn a year earlier. Investors have been waiting to see how trading revenue fared at the five big Wall Street banks due to an escalating US-China trade war and executives warning that the business’s growth would be muted.
Citigroup reported a 9% jump in bond trading revenue, outperforming bigger rival JPMorgan Chase & Co, which reported a 10% drop in fixed-income trading revenue.
Chief financial officer John Gerspach, who plans to retire next year, had previously said Citigroup expected total fixed income and trading revenue to be “flat to slightly higher” in the third quarter.
Citigroup reported a 2% rise in global consumer banking revenue. The bank recently restructured its US consumer business to operate more like those in Asia and Mexico, where it has been seeing better results.
Consumer banking revenue in Latin America rose 20%, including a gain on the sale of an asset management business in Mexico.
Excluding that gain, revenue rose 8% on a constant currency basis, boosting global consumer banking revenue 3%.
North America branded card business reported a 3% drop in revenue, largely due to the sale of the Hilton hotels portfolio. Excluding the sale, net interest revenue from the business was $1.88bn, up 5% from the second quarter and 3% from a year earlier.
Earnings per share rose to $1.73 from $1.42, helped by buybacks that reduced shares outstanding by 8% from a year earlier. Revenue was slightly lower at $18.39bn, from $18.42bn a year earlier.
Citigroup’s provision for income taxes fell by $395m following changes in the US tax code, which reduced the bank’s tax rate to 24% in the quarter from 31% a year earlier. Citi shares were up by over 1% yesterday, but they have lost 8% of their value to date this year.