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Citigroup said quarterly profits rose 10 per cent from last year, even as the bank faced higher losses in its credit card business and a $136mn regulatory fine.
The bank earned a better than expected $3.2bn in the quarter. Revenue increased to more than $20bn, up from $19bn a year ago.
Citi’s corporate and investment bank was the biggest driver of profits for the second consecutive quarter, after a resurgence in dealmaking and debt offerings.
Chief executive Jane Fraser has revamped the leadership of the banking division, recruiting JPMorgan investment banking veteran Vis Raghavan to head the business.
Tyler Dickson, the former head of Citi’s investment bank who had been with the group for more than 30 years, announced this week that he was leaving for private equity giant Blackstone.
The banking division, which includes corporate lending and investment banking, generated revenue of $1.6bn in pre-tax profits, up 38 per cent from the same period a year ago.
“Our results show the progress we are making in executing our strategy and the benefit of our diversified business model,” said Fraser.
Citi is midway through a restructuring announced last September. It has promised to cut as many as 20,000 jobs by 2026 to boost returns that have lagged behind rivals.
Nine months into the programme, Citi has already reduced the number of employees by 11,000, but substantial cost reductions have yet to materialise.
Citi’s results included a $136mn fine for failing to comply with the terms of a 2020 deal with US banking regulators to improve data management and risk controls.
The bank’s quarterly earnings were also weighed down by losses tied to consumer lending, as higher interest rates have started to hurt cash-strapped US households.
Profits in Citi’s US credit card and consumer banking businesses fell 74 per cent from a year ago.
Credit losses in those businesses cost the bank $2.3bn in the quarter, up from $1.5bn a year ago, largely driven by a rise in delinquent credit card borrowers.
Year-on-year growth in revenue from credit cards issued on behalf of retailers such as Costco or Home Depot also dropped to 6 per cent, from 18 per cent in the first quarter, in a sign consumer spending is weakening.
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