third-quarter profit slumped 34% and the bank set aside billions of dollars to cover potential losses in the coronavirus recession.
Citigroup posted a profit of $3.23 billion, or $1.40 a share, down from $4.91 billion, or $2.07 a share, one year ago. Analysts had expected 91 cents a share, according to FactSet. In the second quarter, profit had fallen to 50 cents a share.
Revenue in the consumer bank fell as people continued to struggle through the recession. The Wall Street operations turned in higher revenue as trading surged in the uncertain market and bankers helped nervous companies raise cash and sell stocks and bonds to ride out the downturn. JPMorgan Chase & Co., which also reported results Tuesday, followed a similar pattern, though its overall profit rose 4%.
Still, the results were better than the second quarter’s and topped analyst expectations. The bank slowed the pace of bulwarking for its loan portfolio, socking away another $2.26 billion of loan-loss provisions in the quarter. It had put more than $7 billion aside in each of the past two quarters.
Citigroup has had its own upheaval as well. Chief Executive Michael Corbat surprised analysts when he announced last month he would retire in February, handing the reins to bank President Jane Fraser. Last week, regulators hit Citigroup with a $400 million fine and orders to take expensive, time-consuming steps to improve its risk management infrastructure. Citigroup’s shares are down 43% this year, underperforming the KBW Nasdaq Bank Index’s 30% drop.
Total revenue fell 7% to $17.3 billion from $18.57 billion. Analysts had expected $17.21 billion.
In the consumer bank, revenue dropped 13% and profit declined 30%.
The investment and corporate banking operations held up better than the consumer bank. Companies continued to raise new money from stocks and bond sales, creating new securities for Citigroup’s markets team to trade. Revenue for the total investment bank rose 5%, but profit slipped 10%.
Write to David Benoit at [email protected]
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