Citigroup Inc., a leading global bank that serves more than 200 million customers and does business in more than 160 countries and jurisdictions, shared its net income for the third quarter of this year, which, according to their press release, amounted to $3.5 billion ($1.63 per diluted share), on revenues of $18.5 billion.
The bank’s revenues increased by 6% from the prior-year period, primarily due to the gain on the sale of its Philippine consumer business as against a loss on the sale of its Australian consumer business for the same period last year.
The third-quarter results also included Asia Consumer divestiture-related impacts of approximately $520 million in earnings before taxes (approximately $256 million after-tax) which is primarily driven by a gain on the sale of the bank’s Philippine consumer business.
Excluding these divestiture-related impacts, Citigroup’s revenues went down by 1%, as growth in net interest income was more than offset by lower non-interest revenues.
On this basis, higher net interest income was driven by the impact of higher interest rates across businesses and strong loan growth in Personal Banking and Wealth Management (PBWM).
This scenario was more than offset by lower non-interest revenues reflecting declines in Investment Banking and Markets in Institutional Clients Group (ICG) and investment product revenues in Global Wealth Management in PBWM.
Citigroup’s net income of $3.5 billion also decreased by 25% from the prior-year period, primarily driven by higher cost of credit resulting from the loan growth in PBWM and higher operating expenses.
Earnings per share of $1.63 decreased 24% from the prior-year period, reflecting the lower net income, which was partially offset by an approximately 4% decline in average diluted shares outstanding.
“We are intensely focused on supporting our clients and executing our strategy. We have made good progress on many of the core business drivers we laid out at Investor Day, despite the complex macro environment,” said Jane Fraser, CEO of Citi, in a press statement.
“Treasury and Trade Solutions saw revenues up 40% year-over-year, with growth across all segments, and Securities Services was up 15%. In Fixed Income, we matched last year’s showing through our strength in FX, while Equities came in lower than last year. Banking was the business most adversely impacted by the macro environment with reduced deal flows and a lower appetite for M&A. While the backdrop for wealth management was difficult, our revenues were up outside of Asia. U.S. Personal banking further solidified its growth trajectory with double-digit revenue growth in both of our card businesses,” she added.
Ms. Fraser also shared that the bank will continue to shrink Citi’s operations and exposure in Russia and will end nearly all of its institutional banking services by the fourth quarter of this year. This means that Citi will be winding down its presence in Russia.
“We returned $1 billion in capital to our shareholders and ended the quarter with a CET1 ratio of 12.2%, as we actively managed our RWA to improve the returns we generate for our shareholders. Given the strength of our balance sheet, capital levels, and liquidity, we’re well positioned to help all of our clients navigate very challenging markets and slower growth,” the CEO added.
NOTE: Percentage comparisons throughout this press release are calculated for the third quarter of 2022 versus the third quarter of 2021 unless otherwise specified.