ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • Survey
  • videos
  • photos
  • More ...
    • VIDEOS
    • PHOTOS
BREAKING NEWS
  • Rakesh Jhunjhunwala portfolio's net worth drops by 25% or Rs 8300 cr in 3 months owing to weak market
  • Zomato-Blinkit Deal: Food aggregator accused of not sharing information about deal on time; Investors file complaint with SEBI
  • Delhi government monsoon session commences today; salary hike of ministers, MLAs on the cards
  • National Pharmaceutical Pricing Authority fixes retail prices of 84 drug formulations
  • Twitter Blue users on Android can now customise navigation bar
Read in App
Business News » World News

Citigroup beats profit estimates on lower expenses, shares rise

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App

Citigroup Inc beat Wall Street profit estimates on Monday as lower expenses offset a drop in quarterly revenue, stemming from year-end volatility in its fixed-income trading business.

Citi is the first of the major U.S. banks to report fourth-quarter results. Wall Street majors JPMorgan Chase & Co, Bank of America Corp and Goldman Sachs will report later this week.

Citi officials also said they had yet to see an effect on business from a partial U.S. shutdown but that could change if the shutdown continues.

Excluding a one-time tax related gain, quarterly profit rose to $4.2 billion, or $1.61 a share, in the quarter ended Dec. 31, from $3.7 billion, or $1.28 a share, a year earlier. Analysts had expected a profit of $1.55 per share, according to IBES data from Refinitiv.

Shares of the third-largest U.S. bank rose more than 3 percent to $58.49 in mid-morning trading.

But revenue in Citi`s markets and securities business fell 21 percent in the fourth quarter, with the bank citing widening credit spreads and the market correction in December.

Banks with big trading businesses benefit when markets move, because it prompts customers to buy and sell securities. But sudden bursts of volatility can be damaging, leading customers to avoid trading and also hurting banks` ability to hedge their own market exposures.

Overall revenue fell 2 percent to $17.1 billion, below Wall Street expectations of $17.6 billion, according to IBES data from Refinitiv.

The bank said it reduced compensation costs as markets revenue lagged and that overall expenses declined 4 percent from a year-earlier.

In fixed-income markets, Chief Financial Officer John Gerspach said that for much of the quarter corporate and investor clients “remained on the sidelines, waiting for some clearer market conditions."

Stock markets gyrated wildly in December and yield spreads, or the additional premium investors demand for holding corporate bonds over safer U.S. Treasury securities, also widened significantly in the fourth quarter as investors globally sharply retreated from risky investments.

The revenue decline hurt Citigroup`s effort to hit an efficiency target set by Chief Executive Officer Michael Corbat, though it exceeded his goal for returns on tangible common equity (ROTCE).

The bank reported an efficiency target of 57.4 percent for 2018, just shy of Corbat`s 57.3 percent goal. Its ROTCE of 10.9 percent last year was above the 10.5 percent target.

A lower efficiency ratio means a bank is better at managing its costs relative to revenue, while ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.

Investors have been pushing Citigroup to prove it can grow revenue and profits, rather than simply returning capital through share buybacks. Skepticism over its potential to grow its underlying businesses hangs over its share price, with Citi trading at a lower valuation than rival U.S. banks.

Last week the bank signed a deal with one of its largest shareholders, ValueAct, granting the activist investor more access to its board.

Citigroup`s costs fell 4 percent as the bank wound down legacy assets and benefited from lower compensation costs related to the market downturn.

Earnings per share were also boosted by an 8 percent decline in outstanding stock as Citigroup bought back 74 million of its own shares.

Even though Citigroup returned more than 100 percent of its annual earnings through dividends and stock buybacks, the stock is still trading below tangible book value, Oppenheimer analyst Chris Kotowski noted in a report after Citi`s earnings release.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Economy
Updated: Mon, Jan 14, 2019
09:45 pm
Reuters
RELATED NEWS
Crisil cuts FY23 GDP growth estimate to 7.3% Crisil cuts FY23 GDP growth estimate to 7.3%
US stocks see worst first half drop in over 50 years US stocks see worst first half drop in over 50 years
Rupee hits record low of 79.11 against US dollar in early trade Rupee hits record low of 79.11 against US dollar in early trade
Retail inflation for industrial workers rises to 6.97% in May Retail inflation for industrial workers rises to 6.97% in May
GST Council Meeting: Full details of goods and services, where rates hiked or slashed GST Council Meeting: Full details of goods and services, where rates hiked or slashed

LATEST NEWS

IRDAI sets a target of 5 years for life insurance companies for greater penetration; proposes state-level committee

Gold Price Today: Yellow metal subdued on marginal pressure from high dollar index – check prices in metro cities

Buy, Sell or Hold: What should investors do with Manappuram Finance, ONGC and MHRIL?

National Apprenticeship Promotion Scheme Latest News: DBT - Govt to directly transfer Rs 1500 per month

Gold gains Rs 241 amid firm global trends

Indian Railway opens sleeping pod hotel at CSMT

Zomato-Blinkit Deal: Food aggregator firm accused of not sharing information about deal on time; Investors file complaint with SEBI | Details

OnePlus TV 50 Y1S Pro with 4K UHD display launched at Rs 32,999 in India - Check availability

Noise ColorFit Pro 4, ColorFit Pro 4 Max smartwatches launched; price starts at Rs 3,499

IndiGo's OTP plunging in last 2 days: mass bunk, salary discontent among cabin crew

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV