Citigroup profits climbed in the third quarter, even as chief executive Jane Fraser sounded the alarm about faltering consumer finances.
The bank reported a 2 per cent rise in net income to $3.5 billion (€3.3 billion). Revenues rose by almost 9 per cent, to $20.1 billion. Citi said the rise in profits was mainly due to the higher revenues, partly offset by higher expenses and higher cost of credit.
Analysts had expected profits to drop from a year earlier, as banks’ lending growth has slowed and they come under pressure to pass on higher interest rates to savers.
All five of Citi’s core businesses – corporate lending; credit cards and US consumer banking; transaction services; buying and selling stocks and bonds; and private banking – reported rising sales.
Fraser nonetheless warned about US consumers cutting back. “Continued deceleration in spending indicates an increasingly cautious consumer,” she said on Friday.
Last week, Fraser said “cracks” were emerging in the finances of many Americans. “I think some of the excess savings from the Covid years are getting close to depletion,” she said in a television interview.
There were limited signs of those cracks in Citi’s third-quarter results.
Revenue from credit cards that Citi issues in the name of Costco and other chain retailers rose 21 per cent from a year ago.
On Wall Street, Citi’s revenue from bond, commodity and currency trading was about $350 million higher than analysts had expected and 14 per cent higher than last year. Fees from investment banking rose for the first time since the final quarter of 2021.
But the bank has lagged behind peers in recent years and last month unveiled its largest restructuring in more than 15 years.
Citi did not provide any further details of those plans in its results statement on Friday. – Copyright The Financial Times Limited 2023
