TLDR:
- Citigroup’s Q3 2024 earnings beat estimates with $1.51 EPS vs $1.31 expected
- Revenue rose 1% to $20.32 billion, beating expectations of $19.84 billion
- Investment banking revenue increased 31% year-over-year
- The bank set aside more money for potential loan losses
- Expenses decreased 2% year-over-year as efficiency measures take effect
Citigroup reported stronger-than-expected third quarter results for 2024, with earnings per share of $1.51 beating analyst estimates of $1.31. Revenue rose 1% year-over-year to $20.32 billion, also surpassing expectations of $19.84 billion.
The bank saw growth across several key segments. Investment banking revenue jumped 31% compared to the previous year, while the Services division posted record revenue of $5 billion, up 8%. Equity markets revenue increased 32%, though fixed income revenue declined 6%.
Despite the positive revenue trends, Citigroup’s net income fell to $3.2 billion from $3.5 billion a year earlier. This was largely due to the bank setting aside more money to cover potential loan losses, with credit costs rising 45% year-over-year.
“We’re seeing a stabilization in loan delinquency among our retail services clients,” said CFO Mark Mason on an analyst call. He added that the bank is “well reserved” in this area.
CEO Jane Fraser emphasized the bank’s ongoing transformation efforts, noting they had closed another longstanding regulatory consent order related to anti-money laundering systems.
“I and the management team remained steadfast and determined to get this transformation right and to get this done,” Fraser stated.
Those transformation initiatives appear to be yielding results on the cost side. Citigroup reduced expenses by 2% compared to the previous year, in line with its full-year expense guidance of $53.5 to $53.8 billion.
The bank maintained a strong capital position, with a Common Equity Tier 1 ratio of 13.7%. Citigroup returned $2.1 billion to shareholders through dividends and share repurchases during the quarter.
Looking ahead, the bank expects its net interest income excluding markets to remain roughly flat in the fourth quarter compared to Q3. Citigroup did not provide net interest income guidance for 2025.
While the earnings beat initially sent Citigroup’s stock higher in pre-market trading, shares were down 4.8% by midday as investors digested the increased credit costs. Still, the stock has outperformed both the S&P 500 and broader financial sector year-to-date, rising over 28% through Monday’s close.
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