New York, NY, United States (4E) – Citigroup Inc. said third-quarter profit missed analysts’ estimates due to falling revenues from U.S. mortgages and 26 percent fall in bond trading.
The third-biggest U.S. bank reported a profit of $3.23bn, or $1 per share, compared with a $468mn profit, or 15 cents per share, from the previous year. In the year-earlier period, the company had a $4.7bn charge linked to its brokerage joint-venture Morgan Stanley Smith Barney.
Excluding one-time items and adjustments for debt valuation, earnings fell to $1.02 per share from $1.06 per share, and two cents lower than the average estimate of 26 analysts in a Bloomberg News survey. Revenue climbed 30 percent to $17.88bn, but fell 4.9 percent to $18.22bn on an adjusted basis.
Fixed-income trading revenue shrank 26 percent from a year ago and 17 percent from the second quarter, falling more than rival JPMorgan Chase, which said on Friday that results were hurt by slower fixed income markets.
Citigroup Chief Executive Michael Corbat has been cutting jobs, shutting down branches and scaling back operations in some countries to offset a drop in mortgage refinancings and weaker revenue from bond trading.
The fixed-income business, which accounted for around a fifth of Citi’s revenue last year, was hit with home lending due to concerns that the U.S. Federal Reserve would reduce the pace of its monthly bond purchases that drove down borrowing costs to near record lows.