Dive Brief:
- Citigroup reported a 15% jump in its net income year-over-year, to $4.98 billion from $4.31 billion, during its fourth-quarter earnings call Tuesday.
- Trading revenue saw an almost 31% boost as markets bounced back from last year’s slump. Fixed-income trading surged 49% over last year’s fourth quarter — more than double the increase analysts expected. But that figure was tempered by a 23% drop in equity trading.
- North American branded cards notched their second straight quarter with double-digit-percentage growth. Revenue in the segment grew 10% to $2.4 billion. An 11% jump in the third quarter helped buoy Citi’s previous earnings call.
Dive Insight:
Citigroup shares jumped to their best year in two decades in 2019, increasing 53%. Those gains outpaced rivals JPMorgan Chase, Wells Fargo and Bank of America, according to CNBC.
The bank's splashiest moves in 2019 appear to be paying off. The turnaround in Citi's trading division comes nearly six months after the bank announced plans to cut hundreds of jobs there.
Citi's consumer bank, too, posted gains during its first earning call with Jane Fraser at the helm. The consumer bank’s revenue was up 5% to $8.46 billion, and its profit jumped 12% to $1.58 billion. The corporate bank’s revenue and profit, meanwhile, both rose 10%, to $9.38 billion and $2.88 billion, respectively.
Citi CEO Michael Corbat credited solid client engagement for helping the bank close 2019 with 16 consecutive quarters of loan and deposit growth.
“We enter 2020 in a strong competitive position,” he said. “We continue to invest in areas where we see opportunities for client-led growth and in our infrastructure, in light of the enduring need to be an indisputably strong and stable institution.”
One segment Citi appears determined to grow is its institutional clients group, where the bank aims to hire 2,500 programmers, presumably to bolster its trading and investment banking efforts.
Corbat has said he wouldn’t sacrifice investments in the business to hit a few targets. Still, the bank seems to be surpassing quite a few. It aimed for a 12% return on tangible common equity, a measure of the profitability of its assets. Analysts widely expected the bank to miss, yet it wound up 2019 at 12.1%. The bank has vowed to hit 13.5% in 2020.
Citi’s overall revenue rose 7% to $18.38 billion from $17.12 billion last year. Analysts had predicted $17.9 billion.
