Citigroup’s Profit Drops 36% to $2.92 Billion, Missing Analyst Expectations
Citigroup, one of the major banking institutions, reported a 36% drop in its quarterly profit to $2.92 billion, or $1.33 per share, missing analysts’ expectations by two cents. The bank’s revenue also slipped by 1% to $19.44 billion, slightly below the projected $19.34 billion.
The institutional clients group, which includes investment banking and trading, witnessed a significant decline in revenue, falling by 9% to $10.44 billion. Trading revenue experienced a 13% drop, with fixed-income trading down 13% and equities down 10%.
The investment banking division, encompassing fees from mergers and selling corporate stock and debt, also suffered, as revenue plunged by 24% to $612 million.
However, not all segments of Citigroup’s business struggled. The bank’s operations that serve large corporations worldwide, assisting them in movement of money, continued to benefit from increased interest rates and money flows. This business saw a 15% increase in revenue, amounting to $3.5 billion.
In the consumer bank and wealth management unit, Citigroup experienced a 6% rise in revenue to $6.4 billion.
One crucial metric that Citi investors focus on, return on tangible common equity, declined to 6.4% from 11.2% compared to the previous year.
Expenses also rose by 9% to $13.57 billion, partly due to increased severance following job cuts.
Citigroup’s results were significantly affected by charges from consumer businesses the company is exiting worldwide, including Mexico. Excluding these charges, the bank stated that it would have earned $1.37 per share.
Shares of Citigroup remained flat in early trading following the release of these financial results.