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July 13, 2018

Citigroup profit beats on consumer banking strength


Citigroup profit beats on consumer banking strength
© Reuters. The Citigroup Inc logo is seen at the SIBOS banking and financial conference in Toronto

Citigroup Inc's (N:C) quarterly profit topped Wall Street estimates on Friday, helped by strength in its consumer banking business in Mexico, North America and Asia.

The third-largest U.S. bank by assets, like its peers, also benefited from a cut in income tax rates and an expanding U.S. economy that fueled demand for loans.

Net income rose to $4.49 billion in the second quarter ended June 30, from $3.87 billion a year earlier, driven by a 14 percent jump in net income for its global consumer banking.

Pretax profit from continuing operations increased 5 percent.

Earnings per share rose to $1.63 from $1.28 and topped analysts' average estimate of $1.56, according to Thomson Reuters I/B/E/S.

The bank's provision for income tax fell by $351 million, following President Donald Trump's corporate tax rate cuts.

Buybacks reduced shares outstanding by 8 percent from a year earlier, further boosting earnings per share.

Revenue rose about 2 percent to $18.47 billion but came in slightly below the average expectation of $18.51 billion as revenue from its investment banking business fell 7 percent.

The bank's fixed income trading revenue fell 6 percent, while equity trading revenue rose 19 percent. Total markets and securities services revenue fell 1 percent.

Last month, Chief Financial Officer John Gerspach said he expected trading revenue to be "flattish" compared with a year earlier.

Through Thursday, Citigroup shares are down 7.9 percent for the year, compared with the 1 percent drop in the broader KBW Bank Index (BKX).

JPMorgan Chase & Co's (N:JPM) quarterly profit topped Wall Street's expectations on Friday, as trading revenue came in much higher than expected and demand for loans increased on the back of a strengthening U.S. economy.

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