Citi Weathers Trading Volatility as Mobile Efforts Gain Traction

Citigroup’s trading business may have been the focus on Monday (Jan. 14) upon releasing fourth-quarter results – injecting a bit of volatility into the numbers – but mobile initiatives and credit trends showed traction in the latest set of data from the company.

As reported, the overall top line at Citi was $17.1 billion, which was down 2 percent from last year. The Street had expected $17.6 billion, which would have been a slight increase. But trading, where $2.6 billion in revenue contribution was down 14 percent from last year, proved a headwind, and clients proved risk-averse, as management stated on the earnings call.

Still, the company said that it earned an adjusted $1.61 per share, which topped the Street by six pennies and demonstrated some cost control.

Beyond the vagaries of trading and stocks and bonds (following a December many investors would rather forget), there were several pockets of growth. The firm noted that revenue from Treasury and Trade Solutions, which focuses on corporate services, gained 7 percent to $2.4 billion.

And, as has been seen in recent quarters, consumer spending remained resilient. Revenue from credit cards gained 1 percent, standing at $5.1 billion.

Drilling down into the consumer profile a bit, Citi said that in North America, total revenues from consumer banking in this region came to $5.2 billion, which was up 1 percent year on year, and where retail services, stripping out mortgage activity, was up 5 percent. Revenue from branded cards came to $2.2 billion, flat with a year ago, as average loans gained 2 percent.

Digital momentum in North America continued, as active digital customers gained 5 percent year on year to 18 million. Management said on the earnings call that part of the expense management and cost savings that have been seen in past periods and going forward have been driven in part by the shift from what was cited as “analog to digital.”

In the latest period, digital customers were defined as those individuals who used all online or mobile services within the past 90 days through November 2018. Citigroup said that active mobile customers – defined as users of mobile services through mobile apps or mobile browsers – were 11 million, gaining 12 percent. The growth in mobile activity came as branch count in North America was down 1 percent to 689.

Similarly, internationally, branch count was off 2 percent to 1,721 branches. Active digital customers and mobile customers each logged double-digit growth year over year, at a respective 21 percent and 46 percent rates, to 11 million and eight million.

Average loans held on branded cards, said the firm, were up 2 percent to $89 billion in the U.S., while the same figure grew 3 percent internationally to $24 billion.