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Citigroup equity trading surged 38% boosting better than expected Q118 earnings before the market opened. $C follows JPMorgan Chase $JPM. Wells Fargo $WFC, PNC Financial $PNC with strong trading revenue. 

Citigroup

Earnings:

EPS of $1.68 ahead of expected $1.61, on revenue of $18.87 billion under expected revenue of $18.9 billion.

Citigroup Inc NYSE: $C

Reaction April 13, 10:57 AM EDT 70.51 ▼ 1.74 (2.41%)

(After Opening at $73.21)

Breakdown

  • Global consumer banking revenue rose 7%,
  • Institutional clients revenue rose 6%,
  • Fixed income market revenue down 7%
  • Equity markets revenue surge 38%.

 

Buybacks and Dividends

  • Citi returned $3 billion in capital to stockholders during the three-month period.
  • The company also reaffirmed its commitment of returning about $60 billion to shareholders over the three-year period ending 2019.

Tax Reform Affect Last Quarter

Citigroup booked a $22 billion charge to account for the tax reform changes.

The bank said the effect on capital that regulators scrutinize was "much less significant," through CEO Michael Corbat in a statement. $C noted the annual bank "stress tests," or Comprehensive Capital Analysis and Review (CCAR),

"Tax reform does not change our capital return goals as we remain committed to returning at least $60 billion of capital in the current and next two CCAR cycles, subject to regulatory approval,. Tax reform not only leads to higher net income and increased returns, but also serves to strengthen our capital generation capabilities going forward."

Caution hangs over the sector as auto and student loans also overhang the banking and finance sectors. Citigroup Price trajectory over the past year has been upward, breaking out in September. The bank rally has been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices has also buoyed optimism for the mortgage business and banks profits thereto.

Source: Citigroup, Alphastreet

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