Citi Posts Biggest Quarterly Profit of Pandemic, , on October 13, 2020 at 12:03 pm

Financial News
By
On October 13, 2020
In Financial News
Tags:

(Bloomberg) — Citigroup Inc. posted its biggest quarterly profit of the pandemic after reaping another windfall from trading bonds and expressing newfound confidence in the resilience of its loan book.Traders focusing on fixed income, currencies and commodities posted their best third quarter in eight years, while the firm set aside about $1.5 billion less for bad loans than what analysts had estimated. That helped the bank blunt the impact of regulatory costs and low interest rates.While the trading boon came from a surge in client activity that’s helped Wall Street banks throughout the pandemic, Citigroup’s provisions for loan losses marked a shift. After setting aside almost $15 billion in the year’s first half for problem loans, the firm stockpiled only $2.26 billion in the third quarter — nearly returning to the year-earlier level.“Credit costs have stabilized,” Chief Executive Officer Michael Corbat said in a statement announcing results Tuesday. Overall, “we continue to navigate the effects of the Covid-19 pandemic extremely well.”The bank’s bond traders boosted revenue 18% from a year earlier to $3.79 billion, while its stock traders saw a 15% increase to $875 million — in both cases surpassing analysts’ estimates.Citigroup shares rose 2.1% to $46.84 at 8:02 a.m. in early New York trading. They had declined 43% this year.The company had offered relatively little guidance on loan provisions, leaving analysts guessing far too high. At an investor conference in September, Chief Financial Officer Mark Mason predicted “an additional increase in reserves, albeit meaningfully lower” than earlier this year.Total costs were still elevated by a $400 million fine announced this month by the Office of the Comptroller of the Currency for the bank’s failure to fix longtime deficiencies in infrastructure and controls. The sanction — which some analysts anticipated would be booked later — contributed to a 5% jump in expenses to $11 billion in the third quarter. The bank also entered into two consent orders with regulators that will require years of spending to overhaul its systems.“We are committed to thoroughly addressing the issues contained in the consent orders,” Corbat said in the statement. “These investments will not only further enhance our safety and soundness, they will result in a digital infrastructure that will improve our ability to serve our clients and customers and make us more competitive.”Earlier Tuesday morning, competitor JPMorgan Chase & Co. posted a surprise increase in earnings, fueled by a 30% jump in markets revenue. The biggest U.S. bank also defied expectations by cutting its reserve for loan losses by $569 million, after adding $20 billion to the allowance in the first half.Other key figures from Citigroup’s results:Net income dropped 34% to $3.23 billion, or $1.40 a share, beating the 92-cent average of analyst estimates compiled by Bloomberg. That compares with $1.05 a share in the first quarter and 50 cents a share in the second.Revenue from the firm’s sprawling consumer unit, led by CEO-elect Jane Fraser, dropped 13% to $7.17 billion. That still topped the $6.6 billion estimate of analysts as mortgage and wealth management units benefited from increased activity. Fraser is set to succeed Corbat in February.Debt and equity underwriting pulled in $1.22 billion, surpassing analysts’ projections and helping boost total investment banking revenue 13% to $1.39 billion.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

Citi Posts Biggest Quarterly Profit of Pandemic(Bloomberg) — Citigroup Inc. posted its biggest quarterly profit of the pandemic after reaping another windfall from trading bonds and expressing newfound confidence in the resilience of its loan book.Traders focusing on fixed income, currencies and commodities posted their best third quarter in eight years, while the firm set aside about $1.5 billion less for bad loans than what analysts had estimated. That helped the bank blunt the impact of regulatory costs and low interest rates.While the trading boon came from a surge in client activity that’s helped Wall Street banks throughout the pandemic, Citigroup’s provisions for loan losses marked a shift. After setting aside almost $15 billion in the year’s first half for problem loans, the firm stockpiled only $2.26 billion in the third quarter — nearly returning to the year-earlier level.“Credit costs have stabilized,” Chief Executive Officer Michael Corbat said in a statement announcing results Tuesday. Overall, “we continue to navigate the effects of the Covid-19 pandemic extremely well.”The bank’s bond traders boosted revenue 18% from a year earlier to $3.79 billion, while its stock traders saw a 15% increase to $875 million — in both cases surpassing analysts’ estimates.Citigroup shares rose 2.1% to $46.84 at 8:02 a.m. in early New York trading. They had declined 43% this year.The company had offered relatively little guidance on loan provisions, leaving analysts guessing far too high. At an investor conference in September, Chief Financial Officer Mark Mason predicted “an additional increase in reserves, albeit meaningfully lower” than earlier this year.Total costs were still elevated by a $400 million fine announced this month by the Office of the Comptroller of the Currency for the bank’s failure to fix longtime deficiencies in infrastructure and controls. The sanction — which some analysts anticipated would be booked later — contributed to a 5% jump in expenses to $11 billion in the third quarter. The bank also entered into two consent orders with regulators that will require years of spending to overhaul its systems.“We are committed to thoroughly addressing the issues contained in the consent orders,” Corbat said in the statement. “These investments will not only further enhance our safety and soundness, they will result in a digital infrastructure that will improve our ability to serve our clients and customers and make us more competitive.”Earlier Tuesday morning, competitor JPMorgan Chase & Co. posted a surprise increase in earnings, fueled by a 30% jump in markets revenue. The biggest U.S. bank also defied expectations by cutting its reserve for loan losses by $569 million, after adding $20 billion to the allowance in the first half.Other key figures from Citigroup’s results:Net income dropped 34% to $3.23 billion, or $1.40 a share, beating the 92-cent average of analyst estimates compiled by Bloomberg. That compares with $1.05 a share in the first quarter and 50 cents a share in the second.Revenue from the firm’s sprawling consumer unit, led by CEO-elect Jane Fraser, dropped 13% to $7.17 billion. That still topped the $6.6 billion estimate of analysts as mortgage and wealth management units benefited from increased activity. Fraser is set to succeed Corbat in February.Debt and equity underwriting pulled in $1.22 billion, surpassing analysts’ projections and helping boost total investment banking revenue 13% to $1.39 billion.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

168 Robinson Road,
Capital Tower, Singapore 068912
+65 3105 1295

Taiwan

5th Floor, No. 1-8, Section 5, Zhongxiao East Road, Taipei

Hong Kong

R91, 3rd Floor,
Eton Tower, 8 Hysan Ave.
Causeway Bay, Hong Kong
+852 3002 4462

Australia

44 Martin Place, Sydney 2000 Australia
+02 8319 3232

Indonesia

Millennium Centennial Center, 38th Floor, Jl. Jend. Sudirman Kav. 25
Jakarta 12920, Indonesia

Market Coverage