Citigroup posts $3.2-billion profit amid slump in mortgages, trading
NEW YORK -- Citigroup Inc.’s third-quarter earnings disappointed Wall Street analysts as the bank reported a sharp slowdown in mortgage and bond-trading revenue.
Citi said it earned $3.2 billion, or $1 a share, in net income in the quarter, up from $468 million, or 15 cents a share, during the same period a year ago.
But last year’s third-quarter results included a $4.7-billion pre-tax loss related to Citi’s stake in the Morgan Stanley Smith Barney joint venture.
Excluding that item as well as debt-related accounting adjustments and tax benefits in both quarters, the bank made $1.02 per share -- a decline of 4% and below the $1.04 expected by analysts surveyed by Thomson Reuters.
Citi’s stock slumped more 1.2% in early trading, as shares fell 61 cents to $48.99.
Michael Corbat, Citi’s chief executive, said the bank continued to make progress in its turnaround. He said the bank had further unwound its Citi Holdings segment, a repository of troubled mortgage investments stemming from the financial crisis.
QUIZ: How much do you know about the stock market?
“We performed relatively well in this challenging, uneven macro environment,†Corbat said in a statement. “While many of the factors which influence our revenues are not within our full control, we certainly can control our costs, and I am pleased with our expense discipline and improved efficiency year-to-date.â€
Excluding one-time charges, Citi’s third-quarter revenue of $18.2 billion was off 5% year over year.
The bank cited “significantly lower U.S. mortgage refinancing activity†for a sharp decline in consumer banking revenue. Rivals Wells Fargo & Co. and JPMorgan Chase & Co. have also reported drops in their mortgage businesses.
Bond-trading revenue fell sharply in the third quarter -- by 26% to $2.8 billion -- amid “lower volumes and a more uncertain macro environment,†the bank said. Investment banking revenue also slid, but the bank saw an increase in equity markets revenue.
It was a year ago this week that Corbat took over as Citi’s CEO following the ouster of Vikram Pandit.
ALSO:
Black Friday slide: Macy’s to open 8 p.m. on Thanksgiving
State to hold hearing on EDD unemployment benefits backlog
Costco unsure how cooked chicken was tainted in salmonella outbreak
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
