C Citigroup Inc

By David Benoit and Ben Eisen 

Citigroup Inc. on Tuesday said its third-quarter profit rose 6% and beat expectations.

The New York bank posted a net income of $4.91 billion, or $2.07 a share, compared with $4.62 billion, or $1.73 a share, a year earlier. Analysts had expected $1.95 per share, according to FactSet.

Revenue rose to $18.57 billion from $18.39 billion a year earlier. Analysts had expected $18.54 billion.

The consumer operations posted revenue of $8.66 billion and profit rose to $1.58 billion. The corporate bank's revenue climbed to $9.51 billion and its profit increased to $3.16 billion.

The bank hit a key promise by getting its return on tangible common equity to 12.2% for the quarter and up to 12% for the whole year. Analysts had raised some questions about whether it would hit the 12% mark this year.

Chief Executive Michael Corbat would face pressure to deliver on this as well as return targets for next year. But Citigroup executives have recently warned that things have changed since they set the goals in 2017: the global economy looks weaker than they had hoped, and interest rates are lower than expected.

Expenses ticked up to $10.46 billion. Improving efficiency is another key part of Mr. Corbat's drive to get those returns higher.

In the consumer bank, revenue from card offerings rose to $5.17 billion. Revenue in retail banking, which Citigroup has been expanding, fell 6% to $3.49 billion

In the corporate bank, revenue from Citigroup's core treasury and trade solutions rose 6% while investment banking revenue rose 4%.

In markets, total trading revenue was down slightly to $3.97 billion. A slowdown in overall activity has dampened Citigroup's attempt to build up its equities group. Revenue in that portion fell 4%, and in its larger fixed-income operations revenue was flat.

Across the company, revenue was roughly flat in North America and rose 6% in Asia.

Citigroup's stock has been the best performing of the big banks for the year so far, up 35%, far outpacing rivals in the KBW Nasdaq bank Index and the broader market as it has steadily pushed profits higher. Still, unlike most of its rivals, Citigroup's stock trades below book value, or its net worth. The shares were down about 1% in premarket trading.

Write to David Benoit at david.benoit@wsj.com and Ben Eisen at ben.eisen@wsj.com

(END) Dow Jones Newswires

October 15, 2019 08:58 ET (12:58 GMT)

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