Citigroup third-quarter profits fall 25%
By Michele Maatouk
Date: Friday 14 Oct 2022
(Sharecast News) - Citigroup reported a drop in third-quarter profit on Friday as its investment banking business was hit by a lower appetite for M&A.
Net income fell 25% from the same period a year earlier to $3.5bn, or to $1.63 per share from $2.15. Citi said this was driven mainly by higher cost of credit resulting from the loan growth in personal banking and wealth management (PBWM) and higher operating expenses.
Revenues rose 6% to $18.5bn. However, excluding the gain on sale of the Philippines consumer business during the quarter and the loss on sale of the Australia consumer business in the prior-year period, revenues were down 1%.
Citi said the impact of higher interest rates across businesses and strong loan growth in PBWM were more than offset by declines in investment banking and markets and investment product revenues in the global wealth management arm.
Chief executive officer Jane Fraser said: "Banking was the business most adversely impacted by the macro environment with reduced deal flows and a lower appetite for M&A. While the backdrop for wealth management was difficult, our revenues were up outside of Asia. US personal banking further solidified its growth trajectory with double digit revenue growth in both of our cards businesses.
"We continue to shrink our operations in and exposure to Russia and we will be ending nearly all of the institutional banking services we offer next quarter. To be clear, our intention is to wind down our presence in this country."
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