Citigroup Inc (C) Q3 Earnings Beat, Despite Very Weak Fixed Income Performance


But hopes President Donald Trump would stimulate trading activity and greater economic demand through tax reforms and a loosening in financial regulations have failed to materialize. "Don't freak out. It doesn't mean it's going to be 21 months before we see growth in anything", Chief Financial Officer John Gersprach told analysts.

The poor results for fixed income markets revenue hurts Citigroup Inc's otherwise strong earnings report for the third quarter of the year.

In early notes to clients, analysts characterized the results as "solid" or "pretty good", given problems in bond trading that have affected Wall Street banks for some time.

Wall Street stocks retreated from records Thursday as investors soured on financial shares following earnings from large banks, a sector that has risen significantly this year.

Expenses dropped 2 percent.

The bank's total revenue of $25.33 billion also topped the average analyst estimate of $25.23 billion. Citi's drop in bond trading revenue is similar to what JPMorgan Chase reported on Thursday as well.

JPMorgan, the largest US bank by assets, also topped expectations as loan growth and higher interest rates more than offset a 27 percent slide in bond trading. However, that decline was offset by a 16% increase in equity trading revenue. He said, in the end, September was better than anticipated.

The main growth driver in the quarter was the global consumer business.

Excluding the gain, net income declined 2 percent, reflecting higher cost of credit.

FILE PHOTO - Citigroup CEO Michael Corbat (C) chats with Thomson Reuters CEO Jim Smith and his wife Pam Kushmerick at the Thomson Reuters reception prior to the White House Correspondents' Association Gala in Washington, DC, U.S. on April 27, 2013.

AT&T sank 6.1 per cent as it confirmed many of its full-year financial targets, but said it expects a hit of US$210 million in pre-tax earnings in the third quarter due to USA hurricanes and earthquakes in Mexico.

The store cards business has been grappling with less successful collection efforts after accounts become delinquent.

Citi cited "continued growth in loans and assets under management" for the rise, as well as higher interest rates.

The bank's profit was $4.13 billion, up 8% from $3.84 billion a year ago.

Trading revenue during the fourth quarter of 2016 benefited from a surge in trading activity following the US election.