Citigroup’s third-quarter profits and revenues exceeded expectations, sending shares higher in premarket trading.
Most divisions of the bank posted improving performance from a year ago, including investment banking, stock and bond trading and the bank’s consumer business.
Citigroup’s CEO Vikram Pandit noted in a press release that the bank increased lending during the third quarter.
Citigroup reported a net profit of $468 million. But that included charges tied to a $2.9 billion loss on the sale of its remaining stake in brokerage Smith Barney to Morgan Stanley as well as a $485 million loss on the value of the bank’s debt. Oddly, the bank is forced to take losses when as its credit improves. Yet, the bank boosted its profits by releasing $1.5 billion that it had set aside to protect against losses from loans.
Overall, the bank generated significantly lower losses from its non performing loans. The percentage of loans past due by either 30 or 90 days dropped sharply, painting a healthier picture of the world’s credit quality.
Excluding those items. the bank earned $1.06 per share on $19.4 billion or revenues. Analysts had expected the bank to generated profits of 96 cents a shares on $18.05 in revenues.
Shares of Citigroup were up 1.5% in premarket trading. Citigroup’s shares are up 32% this year, more than doubling the performance of the S&P 500.
Citi is the third big bank to report earnings for the third quarter. JPMorgan Chase and Wells Fargo both reported solid profits last Friday. Both banks touted mortgage lending as one of the key drivers of revenues and profits. Citigroup also said that revenues from new mortgages and refinancings increased its retail banking revenues by 6%.
Goldman Sachs, Bank of America and Morgan Stanley will report earnings later this week.
