The Citibank building in Canada Square in the heart of London's Canary Wharf financial district on May 7, 2024.
Mike Kemp | In pictures | Getty Images
Citigroup Third-quarter results announced Tuesday beat Wall Street expectations, with growth in investment banking and wealth management. However, the bank has set aside more funds to offset potential loan losses.
The bank's shares, which were trading higher before the market opened, recently fell 1.6%.
Here's what the company reported compared to what Wall Street analysts surveyed by LSEG expected:
Earnings per share: $1.51 vs. $1.31 expected Revenue: $20.32 billion vs. $19.84 billion expected
Citigroup's banking division posted an 18% increase in revenue year-over-year, led by a 31% increase in its investment banking arm. Wealth revenues increased by 9%.
Net income fell to $3.2 billion, or $1.51 per share, from $3.5 billion, or $1.63 per share, a year ago. Earnings were hurt by higher costs of credit, including a net increase of $315 million in Citi's provisions for credit losses.
Revenue rose 1% to $20.32 billion from $20.14 billion a year ago.
On the markets side, equity market revenues were up 32% year over year, but fixed income revenues were down 6%.
Citigroup CEO Jane Fraser took over in March 2021 and has focused on reducing the size of the bank during her tenure. This includes reducing Citigroup's global presence and laying off workers. Investors will look for updates on Fraser's turnaround plan during an analyst call later Tuesday morning.
“This quarter contains multiple proof points that we are headed in the right direction and that our strategy is gaining momentum, including positive operating leverage for each of our businesses, equity gains and fee growth,” Fraser said in the earnings release.
Citi's net interest income fell 3% year over year to $13.4 billion as margin contracted. Net interest income was $11.96 billion excluding the markets business, which was also a decrease from last year. Citi said it expects the non-market measure to be roughly the same in the fourth quarter as in this period.
Citigroup cut expenses by 2% year over year and said it expects full-year expenses to be in line with guidance of $53.5 billion to $53.8 billion, excluding some regulatory costs.
Citigroup shares have risen more than 28% since the beginning of the year through Monday, outperforming the Standard & Poor's 500 index and the financial sector.
Other major banks that have reported third-quarter results so far have beat earnings expectations, including Goldman Sachs and JPMorgan Chase.
