adminCitigroup Inc.’s stock rose in premarket trading on Friday after the bank’s third-quarter profit topped Wall Street’s lowered expectations on strength in its core banking services business as well as a strong performance in its Treasury business.
Citigroup
C,
said its third-quarter profit edged up 2% to $3.546 billion, or $1.63 a share, from $3.479 billion, or $1.63 a share, in the year-ago quarter.
Wall Street analysts expected Citigroup to earn $1.22 a share, according to estimates compiled by MarketWatch.
Revenue at Citi increased 9% to $20.1 billion, above the analyst forecast of $19.27 billion.
Chief Executive Jane Fraser said Citi faced “headwinds” but the bank benefited from its services business which includes accounts and deposit services, debit and credit cards, loans and mortgages, small business banking solutions, treasury and trade services, and corporate and institutional lending.
With volatility in the bond market, Citi’s Treasury and trade solutions unit turned in its best quarter in a decade, she said.
Citigroup’s stock was up 2.8% in premarket trading on Friday. The bank’s share price ended Thursday’s trading unchanged. For year-to-date 2023, Citigroup’s stock price has fallen 8.2%, compared to a 13.3% increase by the S&P 500
SPX.
With the banking sector facing headwinds from a slowdown in deal-making to higher bond yields and expectations for a recession in 2024, analyst have been cutting their earnings forecasts for Citigroup.
At the start of the third quarter, Citi was expected to earn $1.32 a share, which is 10 cents more than the estimate on Friday.
For its part, Citi said last month it will simplify its structure by eliminating its personal-banking and wealth-management layer, as well as its institutional-clients group.
It will also do away with regional layers in the Asia-Pacific region, Europe, the Middle East and Africa, and Latin America as it exits these businesses.
On Monday, the bank confirmed reports it’s selling its consumer-wealth portfolio in China to HSBC Plc.
It’s also planning an initial public offering of its Banamex unit in Mexico.
Citi has now exited eight of 14 markets including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand and Vietnam. It expects to exit Indonesia later in 2023 and is working on winding down operations in Korea and Russia.
Also read: JPMorgan Chase’s Q3 profit rises by 35%, bolstered by increased interest income as consumers and businesses ‘generally remain healthy’
Also read: Wells Fargo’s stock gains as third-quarter earnings top estimates by a wide margin
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