Reuters | Jan 14, 2020 13:34
(Reuters) - Citigroup Inc (N:C) beat analysts' estimates for fourth-quarter profit on Tuesday, boosted by growth in its credit card business and a jump in trading revenue.
North American branded cards, which account for a majority of consumer banking revenue, continued to be a bright spot for the bank, clocking double-digit revenue growth for the second straight quarter. Revenue grew 10% from a year earlier.
Citi has been leveraging its robust card business to help grow deposits by pitching checking and savings accounts to card holders.
Trading revenue rose nearly 31% as markets steadied during the last three months of 2019. The gains were driven by a 49% surge in fixed-income trading that offset a 23% decline in equities trading, where weak performance in derivatives weighed on results.
In the year-earlier quarter, the bank's equities trading business came under pressure from a spike in volatility, while a widening of the yield spreads weighed on the fixed-income business.
Citi also reached a key profitability target. The third-largest U.S. bank by assets hit a return on tangible common equity (ROTCE) of 12.1% for 2019, above the goal of 12% it promised investors for the year.
ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.
The lender's shares were up about 1% in premarket trade.
Citi continued to add loans and deposits in the most recent quarter, reflecting continued growth in the economy.
Total end-of-period loans grew 2% and deposits jumped 6%, excluding foreign-exchange fluctuations. Credit costs jumped 15%. Net income applicable to common shareholders rose to $4.98 billion, or $2.15 per share, in the three months ended Dec. 31, from $4.31 billion, or $1.64 per share, a year earlier. Excluding the impact of a tax benefit, the bank earned $1.90 per share. (http://citi.us/2tZ7XOu)
Revenue, net of interest expense, rose about 7% to $18.38 billion.
Analysts had expected a profit of $1.84 per share and revenue of $17.86 billion, according to IBES data from Refinitiv.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
More markets insights, more alerts, more ways to customize assets watchlists only on the App
More content, faster quotes and charts, and a smoother experience is available only on the App.