Citigroup profit soars as lower costs trump revenue fall
By David Henry and Sweta Singh
(Reuters) - Citigroup Inc (C.N: Quote) reported a 51 percent jump in quarterly profit as lower costs more than made up for a fall in revenue amid increased market volatility and uncertainty about the timing of a U.S. interest rate hike.
Legal and related costs of the No.3 U.S. bank by assets nosedived from a year earlier, with the lender putting most of the problems stemming from the financial crisis behind it.
Operating expenses fell 18 percent as Chief Executive Michael Corbat works through his plan to exit businesses where profits and prospects are not worthwhile.
U.S. banks including Citi, JPMorgan Chase & Co (JPM.N: Quote) and Bank of America Corp (BAC.N: Quote) are cutting costs to boost earnings as overnight fund rates stay near zero and fixed-income trading, long a source of revenue growth, shows no sign of picking up.
Citi shares rose as much as 4.3 percent on Thursday.
Citi Holdings, "the bad bank" that holds assets marked for sale, saw the biggest plunge in revenue, a steep 32 percent, as assets in the unit shrank 20 percent.
The lender expects to close an additional $31 billion in Citi Holdings' asset sales in the fourth quarter, Corbat said on a conference call.
Revenue decline in Citicorp, Citi's largest unit that holds core businesses, was the smallest at 2 percent. Continued...