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Citigroup posted better than expected results before the market as equity and fixed interest revenue helped overcome lockdown related credit-loss losses. $C reported after other money center banks JPMorgan Chase $JPM, Wells Fargo $WFC.

Citigroup

Citigroup Inc NYSE: C · Report Before Open Tuesday

$1.40 Beat $0.93 EPS Forecast And $17.30 Beat $17.20 billion Forecast in Revenue

Earnings

Citigroup (NYSE: C) third quarter earnings were better-than-expected results as the company’s credit costs from the pandemic stabilized. Earnings of $1.40 per share vs. 93 cents a share expected, according to Refinitiv on revenue: $17.3 billion vs. $17.2 billion expected. Citigroup’s earnings per share figure includes a $400 million civil penalty. When excluding that cost, the bank’s profit totals $1.55 per share, well above analyst expectations.

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. 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 Close $43.68 USD −2.20 (-4.80%)

“We continue to navigate the effects of the COVID-19 pandemic extremely well,” CEO Michael Corbat said in a statement. “Credit costs have stabilized; deposits continued to increase.”

Highlights

  • Citigroup reported that net credit losses declined to $1.9 billion in the third quarter from $2.2 billion in previous three-month period.
  • The company’s overall cost of credit also dropped to $2.26 billion from $7.9 billion on a quarter-over-quarter basis.
  • Trading revenues for the bank’s fixed income and equities divisions topped expectations 
  • Fixed income trading yielded revenue of $3.8 billion while equities raked in $875 million in sales. Analysts polled by FactSet expected fixed income and equities trading revenues to come in at $3.5 billion and $851 million, respectively.

C Earnings Q3 20

 

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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