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Citigroup posted better than expected results before the market with $C revenues from its fixed-income, currency and commodities trading division getting a boost from higher rates during the quarter. $C reported after other money center banks JPMorgan Chase $JPM, Wells Fargo $WFC.

Citigroup

Citigroup Inc NYSE: C · Report Before Open Tuesday

$2.15 Beat $1.85 EPS Forecast And $18.40 Beat $18.545 billion Forecast in Revenue

Earnings

Citigroup (NYSE: C) beat analysts’ expectations on revenue and earnings for the fourth quarter of 2019. The bank earned, excluding the impact of a tax benefit, $1.90 per share. Analysts on average had expected a profit of $1.84 per share, according to IBES data from Refinitiv. The consensus estimate was for revenues of $17.9 billion. Total revenues of $18.4 billion were up 7% from the same period last year. Net income was $5 billion, or $2.15 per share, compared to $4.3 billion, or $1.64 per share, last year.

  • End-of-period loans were $699 billion, up 2% from last year.
  • End-of-period deposits were $1.1 trillion, up 6% from last year.
  • Book value per share was $82.90. .

Analysts focus on the bank’s cost-ratio outlook for 2019. With the recent market turmoil there will be eyes on variables including geopolitics, loan growth, capital markets revenue and expense outlooks. 

Given that, in the conference call management’s take on the economy, global economic growth and the health of capital markets will be scrutinized. Indications about card margins and growth in North America retail banking with updates on the firm’s national digital bank and its growth prospects in Mexico and Asia are all key data points. Given the market risks and the Fed's so called more flexible policy look for investment banking pipeline talk and credit quality.

Citigroup Inc NYSE: C

Market Reaction Pre-market $81.01 +0.36 (0.45%)%

Highlights

CEO Michael Corbat said, “Due to good client engagement, we drove balanced growth across our products and geographies, closing the year with 16 consecutive quarters of loan and deposit growth. The U.S. consumer franchise saw continued strong growth in Branded Cards and sustained its momentum in attracting digital deposits.”

  • Allowance for loan losses was $12.8 billion at quarter-end, or 1.84% of total loans, compared to $12.3 billion, or 1.81% of total loans, at the end of the prior-year period.
  • Revenues in the Global Consumer Banking division increased 5% to $8.5 billion, driven by growth across all geographic regions.
  • Revenues in Institutional Clients Group increased 10%, aided by strength in Fixed Income Markets, Investment Banking, Treasury and Trade Solutions and the Private Bank.

 

 

Caution hangs over the sector as auto and student loans also overhang the banking and finance sectors.  The new fall in home prices has challenged optimism for the mortgage business and banks profits thereto.

Source: Citigroup

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