Citi’s Global Consumer Banking Sees 5 Pct. Boost YOY

Citigroup fourth-quarter earnings

With increasing sales from its consumer business and formidable fixed-income trading revenues, Citigroup reported quarterly results Tuesday (Jan. 14) that handily came out ahead of analyst expectations for the fourth quarter. The financial firm’s global consumer banking division registered $8.5 billion in sales, which marked a 5 percent rise from the year-earlier period.

CEO Mike Corbat said in a conference call with analysts, “Our strong finish to 2019 was a result of balanced performance of both across both products and geographies. Both North America and international consumer banking had 4 percent year-over-year revenue growth.” Corbat also noted that the company continued to “attract digital deposits from both existing and new customers.”

The bond-trading revenues of Citigroup represented a 49 percent jump from the year-earlier period. The firm noted that the formidable results show a recovery form Q4 2018 with “strong performance, particularly in rates and spread products.” But the bank faced a 23 percent decline in equity trading as the climate for derivatives becomes “more challenging” per Citi.

Shares of Citigroup are off of their best year as of 1999, having jumped over 53 percent in 2019. The rise came out ahead of Bank of America, Wells Fargo and JPMorgan Chase. Bank of America and J.P. Morgan both increased over 40 percent last year.

Citigroup reported revenues of $18.4 billion and earnings of $1.90 per share for the fourth quarter. Analysts had forecast revenues of $17.9 billion and earnings per share of $1.84 per share per Refinitiv, as cited by CNBC. Full-year return on tangible common equity of 12.1 percent came out ahead of the bank’s target.

The news comes as Citigroup experienced a flat third quarter but reported year-over-year gains in treasury as well as trade solutions services for that period. The financial institution, however, came out slightly ahead of analysts earnings expectations in what Corbat had called an “unpredictable quarter.”

Citi reported that its Treasury and Trade Solutions unit revenue rose 6 percent year over year, to $2.4 billion. The bank said in a statement at the time, “[The growth reflects] strong client engagement and growth in transaction volumes, partially offset by spread compression.” Revenue from the Global Consumer Banking arm of the financial institution reached $8.7 billion for the quarter.