Despite Earnings Beat, Citigroup Is Just Par for the Course

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Citigroup Inc. (NYSE: C) reported its third-quarter financial results before the markets opened on Thursday. The company said that it had $1.42 in earnings per share (EPS) and $18.2 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $1.32 in EPS and revenue of $17.9 billion. The same period of last year reportedly had EPS of $1.24 and $17.76 billion in revenue.

At the end of the quarter, loans totaled $653 billion, an increase of 2% from last year. Deposits were up 3% to $964 billion in the same time.

In terms of its segments, the megabank reported:

  • Global Consumer Banking revenues grew 3% year over year to $8.43 billion.
  • Institutional Clients Group revenues grew 9% to $9.23 billion.
  • Corporate/Other shrank 55% to $509 million.

Book value per share was $78.81, and tangible book value per share was $68.55, both representing a 6% increase.

Citigroup’s Common Equity Tier 1 Capital ratio was 13.0%, up from 12.6% in the prior year period, driven primarily by earnings partially offset by the return of capital to common shareholders.

Michael Corbat, Citi CEO, commented:

We delivered a very strong quarter, showing the balance of our franchise by both product and geography and highlighting our multiple engines of client-led growth. We had revenue increases in many of the products we have been investing in, tightly managed our expenses, and again saw loan growth in both our consumer and institutional businesses.

Corbat added:

As part of our $19 billion capital plan, we returned $6.4 billion of capital to our shareholders this quarter, enabling us to begin to reduce the amount of capital we hold. We continue to be focused on increasing both the return on capital and the return of capital for the benefit of our shareholders.

Shares of Citigroup closed Wednesday at $74.94, with a consensus analyst price target of $75.38 and a 52-week range of $47.54 to $76.02. Following the release, the stock was up 0.7% at $75.47 in early trading indications Thursday.