Banks

Citigroup earnings beat on better-than-expected trading results

Key Points
  • The bank's revenues from its fixed-income, currency and commodities trading division got a boost from higher rates during the quarter as well as "improved activity" with corporate and investor clients, Citigroup says.
  • CEO Michael Corbat also touts the strength of the U.S. consumer, noting branded-cards revenue expanded by 11% in North America during the third quarter.
  • However, the bank's lending business posted weaker-than-forecast results, with net interest income coming in at $11.64 billion. Analysts polled by StreetAccount expected net interest income of $12.15 billion.
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Citigroup Q3 results beat on top and bottom lines

Citigroup on Tuesday reported third-quarter earnings and revenue that topped projections as stronger-than-expected trading results made up for weaker lending margins.

Here's how the bank fared compared to Wall Street expectations:

  • Earnings: $1.97 per share vs $1.95 per share expected by Refinitiv.
  • Revenue: $18.6 billion vs $18.545 billion forecast.
  • Fixed-income, currency and commodities trading revenue: $3.211 billion vs $3.09 billion expected by StreetAccount.
  • Net interest margin: 2.56% vs 2.66% forecast.
  • Net interest income: $11.64 billion vs $12.15 billion expected.

Citigroup's earnings of $1.97 per share excludes a tax benefit of 10 cents per share.

The bank's revenues from its fixed-income, currency and commodities trading division got a boost from higher rates during the quarter as well as "improved activity" with corporate and investor clients, Citigroup said.

CEO Michael Corbat also touted the strength of the U.S. consumer, noting branded-cards revenue expanded by 11% in North America during the third quarter.

"Despite an unpredictable environment throughout the quarter, we continue to deliver on our strategy of improving shareholder returns through consistent, client-led growth while also executing against our capital plan," Corbat said in a statement.

However, the company's lending business posted weaker-than-forecast results, with net interest income coming in at $11.64 billion. Analysts polled by StreetAccount expected net interest income of $12.15 billion. Net interest margin, meanwhile, came in at 2.56% for the quarter. That's below a 2.66% forecast.

The bank's stock fell 2% in early trading.

Citigroup shares lagged those of peers such as J.P. Morgan Chase, Goldman Sachs and Wells Fargo in the third quarter. The bank's stock fell 1.4% last quarter while J.P. Morgan Chase and Goldman rose 5.3% and 1.3%, respectively. Wells Fargo, meanwhile, rose 6.6% in that time.

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J.P. Morgan Chase and Goldman reported earlier in the day. J.P. Morgan's results topped expectations, with its quarterly revenue reaching a record. Shares of J.P. Morgan rose 1.3%. Goldman shares slid 3% after the company posted a disappointing profit for the third quarter.

Bank shares were taken for a ride in the third quarter amid wild swings in Treasury yields. The 10-year yield fell to around 1.46% from 2% between late July and early September. This move briefly pushed financials, including the major banks, into correction territory. The yield later recovered, lifting the sector out of its correction.

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Banks

Goldman Sachs shares fall after earnings miss Street estimates

Key Points
  • The bank posted profit of $1.88 billion, or $4.79 a share, below the $4.81 expected by analysts, according to Refinitiv.
  • Revenue came in at $8.32 billion, slightly above the $8.31 billion expected.
  • The shares declined by 3.3%.
  • Among Goldman's four main businesses, its investing and lending division missed expectations by the largest degree.