Trading Boosts Citi Results; Cards Do, Too

Amid bank earnings showing buoyancy, Citigroup reported fourth-quarter earnings that beat expectations by two pennies, coming in at $1.14, even as revenues of $17 billion missed expectations by about $290 million.

As has been seen across the industry thus far, a resurgence in trading helped make headlines, as the bank said fixed-income revenues were up 36 percent from a year ago and equity market trading revenues were up 15 percent.

Looking at the consumer side of the business, international banking gained ground, with a 5 percent gain year over year to $2.9 billion. As has been discussed by peers, regionally speaking for the consumer business, Asia and Latin America proved strong points.

In reference to macro concerns, specifically trade policy, Citigroup CFO John Gerspach told analysts on the conference call that the firm is not all that concerned about what might happen under the incoming Trump administration, stating that there could “a lot of opportunity” through improved competitiveness that could arise in the course of the Trump presidency. One competitive advantage for Citi, said Gerspach, lies in broad scope of the firm’s international transaction network.

With commentary about the global consumer, Mike Corbat, who serves as CEO at the firm, stated that the U.S.-branded cards business “continues to see the early benefits from the Costco portfolio,” elaborated on by Gerspach, who said that the firm had seen total branded cards revenue grow by 15 percent, which reflects the Costco portfolio acquisition. Cumulatively, he said, there have been 1 million new Costco card accounts and $52 billion in purchase sales.

Turning to mobile banking initiatives, management stated on the call that Citi has managed to reduce its physical footprint down 7 percent to about 723 branches at the end of 2016 even as loans and checking deposits were up a respective 6 percent and 9 percent.



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