Citigroup Inc (NYSE:C). announced on Friday that its third quarter (Q3) results exceeded expectations, with rates and currencies traders recording their strongest quarter in eight years. This performance comes amidst uncertainty surrounding the Federal Reserve's interest rate policies. The bank reported an unexpected profit of $2.8 billion, which boosted fixed-income trading by 14% and improved performance metrics, including a marginal rise in net income versus a projected 22% fall.
CEO Jane Fraser announced a comprehensive reorganization of the company, with a focus on trading, banking, wealth management, services, and US consumer dealings. These sectors all saw increased Q3 revenue. Fraser expects this restructuring to result in a more efficient firm offering improved client service.
Citigroup's Q3 revenue reached $20.1 billion, surpassing analysts’ average estimate of $19.2 billion. The firm returned $1.5 billion to shareholders through dividends and buybacks. However, expenses rose due to investments in risk management operations.
Key contributors to the strong performance included Flavio Figueiredo, the new head of Citigroup's currencies-trading franchise, and Pedro Goldbaum and Deirdre Dunn, co-leaders of the rates business.
Citigroup allocated $1.8 billion for Q3 provisions, including a credit-reserve build of $125 million due to higher card balances. The firm’s investment banking revenue surged by 34% to $844 million. CFO Mark Mason reported a 10% rise in total trading revenue.
However, Q3 deposits dropped by 3% as clients moved into higher-yielding investments. The bank also made job cuts as part of its operational adjustments.
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