Alsharq Tribune- world News
Citigroup's profit fell 9% in the third quarter as it set aside more money to cover the risk of loan defaults, particularly on credit cards. The third-largest U.S. lender's net income dropped to $3.2 billion, or $1.51 per share, compared with $3.5 billion, or $1.63 per share, a year earlier, it reported on Tuesday. Revenue rose 1% to $20.3 billion. Citi's dealmakers joined rivals at JPMorgan Chase and Wells Fargo in benefiting from a rebound in capital markets as corporate clients issued more debt and equity. Investment banking was a bright spot for the second straight quarter, with revenue jumping to $934 million. Wall Street executives are optimistic that the Federal Reserve's interest-rate cut last month will pave the way for more deals and initial public offerings. Services revenue climbed 8% to $5 billion, fueled by a 24% surge in revenue for securities services to $1.4 billion. A stock-market rally at the end of the quarter propelled equities trading revenue up 32% to $1.2 billion, lifting overall markets revenue 1%. CEO Jane Fraser has sought to grow profits, simplify the company and fix its longstanding regulatory problems. On Friday, Bank of America's profit in the third quarter fell on the back of lower interest income. Earnings at rival JPMorgan Chase and Wells Fargo beat estimates last week, underpinned by strong consumer finances. REGULATORY EFFORTS In 2020, the Office of the Comptroller of the Currency and the Federal Reserve fined Citi $400 million and ordered the bank to fix persistent risk management and data governance failures. The regulators again fined Citi in July for failing to make enough headway on those problems. It got some relief when the Federal Reserve terminated a 2013 enforcement action on the bank's anti-money laundering programs earlier this month. Citi is giving special attention to data, an area "where we got the feedback that we weren't moving fast enough", Chief Financial Officer Mark Mason told investors in September. It has tasked technology head Tim Ryan to work alongside Chief Operating Officer Anand Selva in fixing the bank's longstanding data management issues. The bank has also added a section to quarterly filings to address its work on the multiple regulatory penalties, known as consent orders. Citi shares have gained 28% so far this year, while an index tracking large-cap banks is up 25% and the S&P 500 index has climbed 23% over the same period.
