Citigroup Inc (NYSE:C) reported better-than-expected third-quarter revenue driven by growth in its Institutional Clients Group and US Personal Banking divisions.
In the third quarter, the bank posted net income of $3.55 billion, or $1.63 per diluted share, on revenues of $20.14 billion.
This compared to net income of $3.48 billion, or $1.63 per diluted share, on revenues of $18.51 billion for the third quarter 2022.
Revenue rose 9%, and was ahead of expectations of $19.31 billion, largely driven by strength across Services and Markets in Institutional Clients Group (ICG) and US Personal Banking within Personal Banking and Wealth Management. as well as growth in Banking.
This increase was partially offset by a revenue reduction from the closed exits and wind-downs within Legacy Franchises, Citi said.
Operating expenses of $13.5 billion in the third quarter 2023 increased 6%, largely driven by investments in risk and controls, severance and the impact of inflation.
The increase was partially offset by productivity savings and expense reductions from the closed exits and wind-downs.
The 2% rise in net income was primarily driven by the higher revenues, partially offset by the higher expenses and the higher cost of credit.
Institutional Clients Group revenue of $10.6 billion was up 12%, driven by growth across Services (up 13%), Markets and Banking (up 10%), and partially offset by an approximately $180 million net impact from a currency devaluation in Argentina on net investment in the country.
Personal Banking and Wealth Management revenue of $6.8 billion increased 10%.
Bad debt provisions edged higher to $17.6 billion at the quarter end, compared to $16.3 billion the year before, while the common Tier 1 equity ratio climbed to 13.5% from 12.3%.
The return on average capital fell to 6.7% from 7.1%.
Chief executive Jane Fraser, who plans to split the bank into five main business lines, said “we are proving to our clients that we truly are a bank for all seasons.”
“Last month we announced consequential changes that align our organizational structure with our strategy and changes how we run the bank. When completed, we will have a simpler firm that can operate faster, better serve our clients and unlock value for our shareholders.”
Shares in Citi are 2.8% higher in pre-market trading.