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Monday, November 30, 2020

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  • Citigroup’s net credit losses declined to £1.47 billion in fiscal Q3.
  • The investment bank reports £13.36 billion of revenue & £1.08 of EPS.
  • The American multinational names Jane Fraser as its next CEO.

Citigroup Inc (NYSE: C) reported its financial results for the fiscal third quarter on Tuesday that blew past Wall Street estimates, as its credit costs attributed to the ongoing Coronavirus pandemic stabilised in recent months. The COVID-19 crisis has so far infected more than 8 million people in the United States and caused over 220 thousand deaths.

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Citigroup tumbled close to 5% in the stock market on Tuesday. Including the price action, shares of the company are now trading at £33.78. In comparison, Citigroup was trading at a much higher £62.71 per share at the start of the year, but had plummeted to £27.32 per share in March.

Citigroup’s Q3 financial results versus analysts’ estimates

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According to Refinitiv, experts had forecast the company to print £13.28 billion of revenue in the third quarter. For earnings per share, their estimate was capped at 71.80 pence per share. In its report on Tuesday, Citigroup topped both estimates posting a higher £13.36 billion of revenue and £1.08 of earnings per share in Q3.

Citigroup’s per-share earnings in the recent quarter were weighed by a civil penalty of £309 million. The investment bank said net credit losses in the third quarter declined to £1.47 billion versus £1.70 billion in the prior quarter. Overall cost of credit, it added, also slid to £1.74 billion from £6.10 billion in Q2.

The American multinational generated £2.93 billion of revenue from fixed-income trading and £675.52 million from equities. In comparison, analysts had anticipated £2.70 billion and £657 million in revenue from the two segments, respectively. Citigroup’s peer, JP Morgan Chase, also published its earnings report for the fiscal third quarter on Tuesday.

Citigroup names Jane Fraser as its next CEO

In September, the New York-based bank announced Jane Fraser as its next Chief Executive. Fraser will fill in the shoes for Michael Corbat and is scheduled to take on the role next year in February. Corbat commented on the earnings report on Tuesday and said:

“We continue to navigate the effects of the COVID-19 pandemic extremely well. Credit costs have stabilised, deposits continued to increase, and revenues are up 3% year to date. Although Global Consumer Banking revenues remained lower as a result of the pandemic, we did see higher activity in our mortgage and wealth management products.

At the time of writing, Citigroup is valued at £70.57 billion and has a price to earnings ratio of 7.60.

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