Citigroup Q3 Earnings: Profit Falls 9%, Investment Banking Revenue Soars, Mastercard and Apollo Partnerships
Citigroup Inc (NYSE:C) reported a third-quarter fiscal 2024 revenue growth of 1% year-over-year to $20.32 billion, beating the analyst consensus estimate of $19.84 billion. Excluding divestiture-related impacts, revenues were up 3%.
GAAP EPS of $1.51 beat the analyst consensus estimate of $1.31.
The stock climbed after the quarterly print in the premarket session but gave up gains.
Net credit losses were $2.17 billion, up 33% Y/Y. Services revenue grew 8% year over year to $5.03 billion, primarily reflecting continued momentum in Securities Services, Treasury and Trade Solutions.
Markets revenue increased by 1% year over year to $4.82 billion, driven by growth in Equity markets revenues, partially offset by lower Fixed-Income markets revenues.
Banking revenue increased 16% Y/Y to $1.6 billion, primarily driven by growth in Investment Banking. U.S. Personal Banking revenue grew 3% Y/Y to $5.05 billion, driven by higher net interest income.
Wealth revenue grew 9% to $2.0 billion, driven by a 15% increase in non-interest revenue. All other revenue declined 18% Y/Y to $1.83 billion, primarily due to closed exits and winddowns.
Net income of $3.24 billion decreased by 9% year over year, primarily reflecting a decline in net income in U.S. Personal Banking (USPB) and All Other. Operating expenses stood at $13.3 billion, a decrease of 2% year over year.
The total allowance for credit losses on loans was $18.4 billion, with a reserve-to-funded loans ratio of 2.70%, compared to $17.6 billion, or 2.68% of funded loans, at the end of the prior-year period.
Citigroup’s end-of-period loans were $689 billion at the quarter’s end, up 3% Y/Y, mainly reflecting growth in U.S. Personal Banking and higher loans in Markets and Services.
At quarter end, deposits were ~$1.3 trillion, up 3% from the prior year, primarily due to an increase in Services.
At the end of the quarter, Citigroup’s book value per share was $101.91 (+3% Y/Y), and its tangible book value was $89.67 (+3% Y/Y).
Citi CEO Jane Fraser flagged its new cross-border payments capability with Mastercard Inc (NYSE:MA) and a $25 billion private credit partnership with Apollo Global Management, Inc (NYSE:APO).
Outlook: Citigroup reiterated its fiscal 2024 adjusted revenue outlook of $80.00 billion—$81.00 billion, compared to the consensus of $80.36 billion.
Citigroup stock gained over 61% in the last 12 months. In September, the U.S. Fed slashed the lending rate by 50 bps, lowering the central bank’s benchmark rate to 4.75%-5% to promote borrowing and lending activities.
Price Action: C stock is down 1.88% at $64.78 at the last check on Tuesday.
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