By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Global lender, Citigroup Inc on Tuesday reported its net income for the third quarter (Q3) 2014 climbed up 6.25 percent to $3.4 billion from $3.2 billion recorded in the same period of 2013, the lender said in statement.
Similarly, earnings per share (EPS) grew 13 percent to $1.15 per diluted share, from prior year earnings of $1.02 per diluted share. The current Q3 EPS reported by Citigroup beat Wall Street analyst estimates.
For the nine month period, analyst on average expected the bank to report adjusted EPS of $1.12.
Also, quarterly revenues were $19.6 billion up from $17.9 billion recorded in the corresponding period of 2013; similarly, Wall Street expected revenues of $19.05 billion.
From the result announcement of the bank, Credit/Debit Valuation Adjustments (CVA/DVA) was negative $371 million (negative $228 million after-tax) in the third quarter 2014, including a $474 million pre-tax charge related to Citigroup’s implementation in the quarter of funding valuation adjustments (FVA), compared to negative $336 million (negative $208 million after-tax) in the prior year period.
The global lender said it intends to exit its consumer businesses in 11 market, it said the new consumer banking footprint will serve nearly 57 million clients in 24 markets that capture over 95 percent of GCB’s existing revenue base, while further simplifying its operations and improving its performance.
Citigroup said it intends to exit its consumer businesses in 11 markets, “Michael Corbat, Chief Executive Officer of Citi, said, “Our consumer bank and institutional business each had solid performance during the quarter and generated stronger revenues both sequentially and year-on-year. The revenue improvement was evident across regions and products. With Citi Holdings again turning a profit and the utilization of additional deferred tax assets, we again demonstrated progress against two execution priorities and increased our capital base. We also continued our work to strengthen our capital planning process to meet the critical goal of returning capital to our shareholders.”
The new consumer banking footprint will serve nearly 57 million clients in 24 markets that capture over 95% of GCB’s existing revenue base, while further simplifying its operations and improving its performance.
The affected businesses according to Corbat include the consumer franchises in Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in Korea.
The lenders CEO added that active sales processes are underway for the majority of the businesses, and subject to market conditions and regulatory and other approvals, the strategic actions are currently expected to be substantially completed by year-end 2015.
He affirmed that the businesses will be reported as part of Citi Holdings as of the first quarter 2015 to provide greater transparency with respect to the performance of the ongoing operations reported in GCB. Citigroup’s Institutional Clients Group (ICG) will continue to serve clients in these markets.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders. While we have made progress optimizing these 11 consumer markets, we believe our Global Consumer Bank will achieve stronger performance by focusing on the countries where our scale and network provide a competitive advantage,” Corbat concluded.
The statement quoted Manuel Medina-Mora, Citi Co-President and CEO of GCB, as saying: “Today’s actions are the next step in the execution of our strategy to build an urban-based, globally integrated consumer bank. Since 2009, the Global Consumer Bank has become more streamlined, efficient and profitable. Focusing our presence in 100 cities across both the U.S. and top emerging markets where we have the greatest scale and growth potential positions us to win.”
