Citigroup Reports Better Than Expected 3Q Earnings

Industries Dow Jones Newswires

FILE PHOTO -- People walk beneath a Citibank branch logo in the financial district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Photo (Copyright Reuters 2016)

Citigroup said Friday that third-quarter profit and revenue were down, but results were still better than what analysts had predicted. 

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The New York-based bank reported a profit of $3.84 billion, or $1.24 a share. That compares with the $4.29 billion, or $1.35 a share, it reported in the same period of 2015. 

That beat the $1.16 expected by analysts polled by Thomson Reuters. 

Revenue was down to $17.76 billion from $18.69 billion a year ago 

That also beat the expectations of analysts, who had predicted $17.36 billion. 

Michael Corbat, who on Sunday will mark four years as the bank's CEO, guided Citigroup through one of its most tumultuous periods, including regulatory and legal reprimands and a lingering image as the poster child of the financial crisis. The bank has stitched up many of those lacerations, and this year it was the only firm to earn passing grades on the living wills, an important regulatory test. 

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But Citigroup now needs to pivot to showing investors that it can improve straggling shareholder returns -- a goal that Mr. Corbat and other executives say is a top priority. 

Trading revenue, excluding an accounting adjustment, rose 16% to $4.13 billion from $3.57 billion a year ago. That was better than what Chief Financial Officer John Gerspach predicted last month, when he said he expected trading revenue to be up by mid-single digits from a year ago. 

Investment banking revenue was also up 15%, to $1.09 billion from $944 million a year ago. 

Expenses were down 2% to $10.4 billion from $10.67 billion a year earlier. 

The bank's shares are down 6% this year, compared with a 3% drop in the KBW Nasdaq index of bank stocks. Shares rose 2% in premarket trading. 

Write to Christina Rexrode at christina.rexrode@wsj.com