Is Citigroup Getting Enough Credit for Q3 Results?

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Citigroup Inc. (NYSE: C) released its third-quarter financial results before the markets opened on Tuesday. The bank said that it had $2.07 in earnings per share (EPS) and $18.60 billion in revenue, which compares with consensus estimates of $1.95 in EPS and revenue of $18.55 billion. In the same period of last year, the bank said it had EPS of $1.73 and $18.39 billion in revenue.

Citigroup’s end-of-period loans were $692 billion as of quarter’s end, up 2% from the prior-year period. The end-of-period deposits were $1.1 trillion, an increase of 8%.

Book value per share was $81.02, and tangible book value per share was $69.03, both as of quarter’s end. Each increased 11% and 12%, respectively, from the prior year, driven by higher net income and the lower share count. It’s worth pointing out that Citigroup’s buybacks have reduced common shares outstanding by 76 million in this quarter alone.

In terms of its segments, the bank reported as follows:

  • Global Consumer Banking revenue was relatively flat year over year at $8.66 billion.
  • Institutional Clients Group revenue increased by 3% to $9.51 billion.
  • Corporate/Other revenue decreased 18% to $402 million.

Michael Corbat, Citi CEO, commented:

Despite an unpredictable environment throughout the quarter, we continue to deliver on our strategy of improving shareholder returns through consistent, client-led growth while also executing against our capital plan. Our Global Consumer Banking franchise performed well in the quarter, showing solid underlying revenue growth of 4% and an EBT increase of 17%.

Shares of Citigroup closed Monday at $70.24, in a 52-week range of $48.42 to $73.08. The consensus price target is $82.23. Following the announcement, the stock was relatively flat at $70.00 in early trading indications Tuesday.


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