Citi pulls consumer banks from 11 markets, posts higher profit

Citigroup said on Tuesday it would exit consumer banking in 11 more markets, as the most international of the big U.S. banks looks to shrink its way to better profits.

"Part of the Citi story over the next two to three years, obviously, is a refocus on profitability rather than growth, so we're looking for, you know, very low, if any, balance sheet growth over the next year and then we'll look at single-digit balance sheet growth going forward," Anthony Polini, a bank analyst at Raymond James, said on "Squawk Box." "This is a story about operating leverage, not growth."

Citigroup also reported a 13 percent rise in adjusted third-quarter net profit, helped by better results from its portfolio of troubled assets left over from the financial crisis.

Adjusted net profit for the quarter rose to $3.67 billion, or $1.15 per share, from $3.26 billion, or $1.02 per share, a year earlier.

Analysts had expected earnings excluding items of $1.12 per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the results were comparable.

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After the earnings announcement, the company's shares rose slightly in premarket trading. (Get the latest quote here.)

Going forward, Polini thinks Citi could go to $70 a share as the financial institution continues to restructure, improve its operating leverage and grow its balance sheet.

Wall Street analysts had expected the bank to post earnings of $1.12 a share on revenue of $19.05 billion for the third quarter.

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In mid-July, the bank said it planned to pay $7 billion to settle a U.S. government probe into mortgage-backed securities it sold.

Citigroup operates in more than 160 countries and jurisdictions with more than 200 million customer accounts.

Reuters contributed to this report.