Citigroup beats by $0.12, beats on revs
- Reports Q3 (Sep) earnings of $1.42 per share, excluding non-recurring items, $0.12 better than the Capital IQ Consensus of $1.30; revenues rose 2.3% year/year to $18.17 bln vs the $17.87 bln Capital IQ Consensus.
- Credit Reserve Build was $194 mln
- Net Credit Losses $1.77 bln, +17% y/y due to integration of COST credit card portfolio. Citigroup's cost of credit in the third quarter 2017 was $2.0 billion, a 15% increase, driven by an increase in net credit losses of $252 million, primarily in North America GCB, as well as a higher loan loss reserve build, which included approximately $100 million of hurricane and earthquake-related loan loss reserve builds across North America GCB and Latin America GCB, as well as the legacy portfolio in Corporate / Other.
- Citigroup's net income increased to $4.1 billion in the third quarter 2017, as the higher revenues and lower expenses more than offset higher cost of credit.
- Citigroup's operating expenses decreased 2% to $10.2 billion in the third quarter 2017.
- Citigroup's book value per share was $78.81 and tangible book value per share was $68.55, each at quarter end, both representing a 6% increase.
- Investment Banking revenues of $1.2 billion were up 14% versus the prior year period, reflecting continued wallet share gains across products, with particular strength in equity underwriting. Advisory revenues decreased 1% to $237 million, equity underwriting revenues increased 99% to $290 million and debt underwriting revenues increased 1% to $704 million.
- Fixed Income Markets revenues of $2.9 billion in the third quarter 2017 decreased 16%, primarily reflecting lower G10 rates and currencies revenues, given low volatility in the current quarter and the comparison to higher Brexit-related activity a year ago, as well as lower activity in spread products. Equity Markets revenues of $757 million increased 16%, reflecting client-led growth across cash equities, derivatives and prime finance.