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Consumer banking powers Citigroup's profit beat
[NEW YORK] Citigroup Inc reported higher profit and revenue on Tuesday, driven by growth in its global consumer business and lower expenses.
Citi, the most global of the US banks, said revenue in its consumer business rose 4 per cent excluding the impact of currency fluctuations, outpacing its arm that caters to institutional clients where revenue grew 3 per cent.
Consumer business was padded by more US credit card customers beginning to pay interest as promotional periods wore off. North America branded card revenue jumped 11 per cent in the quarter.
Trading revenue fell 1 per cent as a decline in equities offset stable revenue in fixed-income trading.
Citi also reached a key efficiency target as it reported higher-than-expected earnings, driven by a lower tax rate.
The third-largest US bank by assets hit a return on tangible common equity (ROTCE) of 12.2 per cent, above its goal of 12 per cent it has promised investors for the year.
ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.
Citi has been focused on building credibility with investors after missing targets in recent years. Estimates often hovered below the bank's stated goals, showing Wall Street analysts were skeptical the management could reach the targets it set.
Citi's net income applicable to the bank rose 6 per cent to US$4.9 billion, or US$2.07 per share, in the third from US$4.6 billion, or US$1.73 per share, a year earlier.
Excluding the impact of a tax befit, the bank earned US$1.97 per share.
Revenue was up about 1 per cent at $18.57 billion.