Net income at Citigroup dropped 23 per cent during this year’s third quarter to $3.2 billion, while private bank revenues – which are up 1 per cent year-on-year - fell from $645 million to $614 million.
Year-on-year, group net income is up considerably from $468 million, although it is worth noting that Q3 2012 results included a pre-tax loss of $4.7 billion ($2.9 billion after tax) related to the sale of its stake in its joint venture brokerage Smith Barney to Morgan Stanley.
Total revenues are down 13 per cent compared to the second quarter of 2013 to $17.9 billion, but are up 30 per cent year-on-year (Q3 2012: $13.7 billion). Excluding credit/debt valuation adjustments and the Q3 2012 MSSB loss, Citigroup revenues of $18.2 billion in this year’s third quarter were 5 per cent below the prior year period.
Michael Corbat, chief executive at Citi, said the firm continued to reduce the size of Citi Holdings - now 6 per cent of the balance sheet - and thus its drag on earnings during the quarter.
“While many of the factors which influence our revenues are not within our full control, we certainly can control our costs, and I am pleased with our expense discipline and improved efficiency year-to-date,” Corbat said.
For example, the total cost for credit fell 3 per cent during the quarter and by 25 per cent since the third quarter of 2012, to $2 billion (Q3 2012: $2.6 billion).
Citi follows JP Morgan and Wells Fargo, as the major banks start releasing their financial results for the third quarter of 2013.