Monday 18 December 2017

Citigroup quarterly profit plunges on $4.7bn

CITIGROUP said quarterly profit plunged on a $4.7bn write-down of its stake in a brokerage operated by Morgan Stanley, but North American mortgage lending revenue increased and capital markets results rebounded.

The New York-based global bank on Monday said third-quarter net income was $468m, or 15 cents a share, compared with $3.77bn, or $1.23 a share, a year earlier.

Adjusted earnings, excluding the previously announced write-down and an accounting charge for the change in the value its debt, was $3.27bn, or $1.06 cents a share, compared with $2.57bn, or 84 cents a share, a year earlier.

It was not immediately clear if the adjusted results were comparable to analysts' average estimate of 96 cents per share found in surveys by Thomson Reuters I/B/E/S.

The adjusted results also included a benefit of 19 cents a share for the resolution of tax audit items.

The bank said profits from the Securities and Banking unit increased 67pc on stronger revenue from fixed income and equity markets and lower expenses. The North American Consumer Banking segment saw an 18pc increase in profits on higher mortgage revenues.

Results outside the United States were generally weaker, with income from International Consumer Banking down 3pc, and profits in transaction services provided to businesses and governments outside North America down by single-digit percentages.

In September Citigroup agreed on a price to sell its 49 percent interest in the brokerage to Morgan Stanley. At the time, it said it would take a charge to reduce its carrying value for the asset by about 40pc.

The joint venture was created in the financial crisis in 2009 as a way for Citigroup to shrink by transferring its Smith Barney brokerage assets to Morgan Stanley.


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