Citigroup posted weaker-than-expected third-quarter earnings on Tuesday, hit by a drop in bond trading revenue after the Federal Reserve refrained from changing its bond-buying program and customer activity fell.
The Fed's decision took investors by surprise and led many to take a wait-and-see attitude until there is a clearer time frame for the end of the central bank's economic stimulus program. (Click here to track the company's shares following the report.)
The third quarter is typically a slow one for bond trading, and this was exacerbated by the Fed announcement, according to analysts. Citigroup's bond trading revenue dropped 26 percent, or $956 million, excluding an accounting adjustment.
In last year's third quarter Citigroup took a pretax charge of $4.7 billion related to selling its Smith Barney brokerage business, a charge that ended up costing Vikram Pandit, then the bank's chief executive, his job.