Lower Expenses and Taxes Send Citigroup's Profits Higher
NEW YORK (AP) — Citigroup said Monday its profits rose in the last three months of 2018, helped by a lower tax rate and lower expenses, which offset a drop in bond trading revenue.
Citi said it earned $4.31 billion in the last three months of 2018, or $1.64 per share. On an adjusted basis, the earnings rose 9 percent.
The results beat analysts' estimates of $1.55 per share, according to FactSet.
In the fourth quarter of 2017, Citi reported an $18.89 billion net loss. The loss was mostly an accounting adjustment, caused by the impact of the then-new tax law which required Citi to write off billions of dollars of what are known as tax-deferred assets.
As expected, Citi had a difficult quarter in its bond trading division. While banks with trading desks typically benefit from volatility, the last three months of 2018 were dominated by extreme market volatility in the stock and bond markets.
Citi's fixed-income trading revenue was $1.9 billion, down 21 percent from a year earlier.
Citi's global consumer banking division had a good but uneventful quarter, reporting an adjusted profit $1.52 billion, up 14 percent from a year earlier. The bank saw revenue gains in its U.S. business, which was more than enough to offset declines in its Latin America and Asia businesses.
Citigroup's stock rose 2.7 percent to $58.25.
The bank is the first of the Wall Street giants to report its results for the quarter. Investors will be looking to see if any of the worries about a slowdown in the U.S. or global economy is impacting profits at the big banks. As the most internationally focused of the big U.S. banks, Citi is particularly exposed to any slowdown in the global economy.
By AP reporter Ken Sweet