The third-largest U.S. bank by assets has been leveraging its robust card business to help grow deposits by pitching checking and savings accounts to card holders.
Trading revenue rose nearly 31% as markets steadied during the last three months of 2019, with the gains driven by a 49% surge in fixed-income trading. Equities trading fell 23% due to weak performance in derivatives.
Rival Wall Street bank JPMorgan Chase & Co also reported an increase in trading revenue on Monday.
The largest U.S. bank by assets said revenue from bond trading surged 86% from a year earlier, when financial markets were roiled by a selloff triggered by concerns over trade and global growth. Revenue from its equities business rose 15% to $1.5 billion.
Citi also reached a key profitability target. The bank hit a return on tangible common equity (ROTCE) of 12.1% for 2019, above the goal of 12% it promised investors for the year.
ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.
The lender’s shares rose 1.5% in early trading.
Citi added loans and deposits in the most recent quarter. Total end-of-period loans grew 2%, while deposits jumped 6%, excluding foreign-exchange fluctuations. Credit costs jumped 15%.
Total loans, excluding home lending, rose 3% at JPMorgan.
Net interest income, or the difference between what a bank pays for deposits and earns from loans, was up 1% at Citi, compared with declines at JPMorgan and Wells Fargo & Co.
The U.S. Federal Reserve cut interest rates three times last year, crimping banks’ lending margins and their ability to raise revenue.
Net income applicable to common shareholders rose to $4.98 billion, or $2.15 per share, in the three months ended Dec. 31, from $4.31 billion, or $1.64 per share, a year earlier. Excluding the impact of a tax benefit, Citi earned $1.90 per share. (citi.us/2tZ7XOu)
Revenue, net of interest expense, rose about 7% to $18.38 billion.
Analysts had expected a profit of $1.84 per share and revenue of $17.86 billion, according to IBES data from Refinitiv.
Reporting by C Nivedita in Bengaluru and Imani Moise and Sweta Singh in New York; Editing by Shounak Dasgupta and Sriraj Kalluvila