Investment Rating - The report does not explicitly state an investment rating for Citigroup (C.US) but indicates that revenue and profit exceeded expectations while net interest margin (NIM) fell short of expectations [1][7]. Core Insights - Citigroup's Q3 2024 revenue growth was 0.9% year-over-year, surpassing Bloomberg consensus forecast of -1.6% [2][7]. - Net profit attributable to common stockholders decreased by 8.7% year-over-year, better than the expected decline of 22.9% [2][7]. - The Common Equity Tier 1 (CET1) ratio increased to 13.7%, up by 0.1 percentage points year-over-year, aligning with expectations [4][7]. Summary by Sections Revenue and Profit Performance - Revenue for Q3 2024 was $20.315 billion, with a year-over-year growth of 0.9%, exceeding the estimate of $19.827 billion [6]. - Net interest income decreased by 3.4% year-over-year to $13.362 billion, better than the expected decline of 4.3% [6]. - Non-interest income increased by 10.2% year-over-year to $6.953 billion, surpassing the estimate of $6.255 billion [6]. Loan and Deposit Growth - Total deposits grew by 2.9% year-over-year to $1.310 trillion, exceeding the expected growth of 0.9% [3][6]. - Gross loans increased by 3.4% year-over-year to $688.922 billion, slightly below the expected growth of 3.6% [3][6]. Asset Quality - The non-performing loan (NPL) ratio decreased to 0.31%, down by 2 basis points from the previous quarter, better than the expected 0.37% [4][6]. - Total credit impairment losses amounted to $2.675 billion, slightly above the expected $2.661 billion [4][6]. Return Metrics - Return on Assets (ROA) was 0.52%, down by 0.06 percentage points year-over-year, exceeding the expected 0.46% [4][6]. - Return on Equity (ROE) was 6.2%, down by 0.5 percentage points year-over-year, better than the expected 5.4% [4][6]. - Return on Tangible Common Equity (ROTCE) was 7.0%, down by 0.7 percentage points year-over-year, exceeding the expected 5.9% [4][6].

Group 1: Earnings Overview - Citigroup reported an increase in investment banking and trading revenues, with overall banking revenues up by 16% to approximately $1.6 billion [1] - Equity market revenues rose by about one-third compared to the previous year [1] - End-of-period card loans reached $164 billion, an increase from $156 billion year-over-year, with net credit losses at 4.4%, up from 3.3% a year ago but down from 4.7% in the second quarter [1] Group 2: Consumer Spending and Credit Metrics - Credit card spending volume increased by 3% year-over-year to $129 billion, with expectations for branded card net credit losses to be between 3.5% to 4% for the full year [2] - The CEO noted that while growth is slower than last year, the global economic performance remains resilient, with a more discerning U.S. consumer [2] - Signs of financial stress are primarily isolated to consumers with lower FICO scores [2] Group 3: Technological Advancements and Transformation - Citigroup is the first global bank to integrate its cross-border services with Mastercard Move, enabling near-instant secure payments across 14 markets [3] - The company has made significant progress in transforming its technology infrastructure, retiring over 450 applications year-to-date and upgrading all ATMs in North America and Asia Pacific to next-gen software [4] - 85% of Citigroup's consumer loans are to consumers with FICO scores of 660 or higher, indicating a focus on credit quality [4]

Financial Data and Key Metrics Changes - The company reported net income of $3.2 billion and earnings per share of $1.51, with a return on tangible common equity (RoTCE) of 7% [7][16] - Overall revenues grew by 3% excluding divestitures, with total revenues up 1% on a reported basis [16][39] - Expenses decreased by 2% to $13.3 billion, driven by organizational simplification and stranded cost reductions [17][18] Business Line Data and Key Metrics Changes - Services delivered a record quarter with revenues up by 8%, driven by significant fee growth and loan and deposit volume growth [7][27] - Markets revenues were up 1%, with equities increasing by 32% while fixed income decreased by 6% [29][30] - Banking revenues increased by 16%, largely driven by a 31% rise in investment banking revenues and a 44% increase in fees [32] - Wealth revenues were up 9%, with client investment assets growing by 24% [34][35] - US Personal Banking revenues increased by 3%, with branded cards revenues up by 8% [36][37] Market Data and Key Metrics Changes - The US consumer remains healthy but more discerning in spending, with signs of stress isolated to lower FICO scores [13][22] - Global economic performance is resilient, with notable growth in regions like India, ASEAN, Japan, the Middle East, Mexico, and Brazil [6] Company Strategy and Development Direction - The company is focused on transformation as its number one priority, aiming to improve performance across all businesses [14][63] - A $25 billion private credit partnership with Apollo was announced, enhancing access to private lending capital [10][46] - The company aims to achieve a medium-term RoTCE target of 15% to 20% for its wealth business [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the US economic outlook, supported by positive payroll reports and resilient consumer sentiment [6][4] - The company is committed to meeting its revenue and expense targets for the year, with a focus on improving performance [14][39] - Management acknowledged the challenges posed by the Basel III Endgame but emphasized a robust capital position with a CET1 ratio of 13.7% [13][25] Other Important Information - The company closed another longstanding consent order related to anti-money laundering systems, indicating progress in regulatory compliance [14][63] - The company has over $22 billion in total reserves, with a reserve-to-funded loan ratio of approximately 2.7% [17][22] Q&A Session Summary Question: Card losses in Retail Financial Services - Management noted that spend volumes are trending down, which is impacting loss rates, and they expect higher losses in the fourth quarter due to seasonal factors [42][44] Question: Partnership with Apollo - Management highlighted the benefits of partnering with Apollo for innovative financing solutions and mentioned that other partners are also involved [45][46] Question: NII outlook - Management indicated that NII ex-markets is expected to be flat in the fourth quarter, with ongoing headwinds from legacy franchises [49][52] Question: Wealth segment performance - Management confirmed that the wealth segment is expected to continue its positive trajectory, aiming for a medium-term RoTCE of 15% to 20% [54][55] Question: Assurance on expense guidance - Management provided confidence in meeting the 2026 expense guidance of $51 billion to $53 billion, citing cost-saving measures and productivity improvements [58][60]

Core Viewpoint - Citigroup Inc. reported a third-quarter 2024 adjusted net income per share of $1.51, exceeding the Zacks Consensus Estimate of $1.34, although it decreased 0.7% year-over-year [1] - The company experienced a 31% year-over-year increase in Investment Banking revenues, primarily driven by strong performance in Debt Capital Markets [1] Financial Performance - Revenues, net of interest expenses, increased by 1% year-over-year to $20.32 billion, surpassing the Zacks Consensus Estimate of $19.90 billion [2] - Net Interest Income (NII) fell by 3% year-over-year to $13.36 billion, while non-interest revenues (NIR) rose by 10% to $6.9 billion [2] - Operating expenses decreased by 2% year-over-year to $13.25 billion, attributed to organizational simplification and stranded cost reductions [2] Segmental Performance - Services segment revenues increased by 8% year-over-year to $5.02 billion, driven by growth in Securities Services and Treasury, and Trade Solutions [3] - Markets segment revenues rose by 1% year-over-year to $4.82 billion, supported by growth in Equity markets [3] - Banking revenues increased by 16% year-over-year to $1.59 billion, primarily due to growth in Investment Banking [3] - U.S. Personal Banking revenues were up 3% year-over-year to $5.05 billion, driven by higher net interest income from loan growth [3] Wealth and Other Segments - Wealth segment revenues rose by 9% year-over-year to $2 billion, driven by a 15% increase in non-interest revenues [4] - Revenues in the All Other segment declined by 18% year-over-year to $1.83 billion [4] Balance Sheet and Credit Quality - Total deposits increased by 2% quarter-over-quarter to $1.31 trillion, while loans increased marginally to $689 billion [5] - Total non-accrual loans fell by 34% year-over-year to $2.20 billion, but provisions for credit losses rose by 45% year-over-year to $2.67 billion [6][7] Capital Position and Deployment - Common Equity Tier 1 capital ratio was 13.7%, up from 13.6% in the prior year, while the supplementary leverage ratio decreased to 5.8% [8] - Citigroup returned $2.1 billion to shareholders through dividends and share repurchases in the reported quarter [9] 2024 Outlook - Management expects revenues of $80-$81 billion, driven by fee growth in the Services segment and a strong Investment Banking business [10] - Projected expenses are estimated to be between $53.5 billion and $53.8 billion, excluding special assessments [10] Overall Assessment - The third-quarter results reflect strength in loans and deposits, alongside lower expenses, with revenue growth driven by various segments, particularly Services and Banking [11] - Business transformation initiatives are expected to support long-term growth by focusing on profitable segments and eliminating non-viable ones [11]

Group 1 - The focus is on income investing through common shares, preferred shares, or bonds [1] - The author targets two articles per week for publication on Mondays and Tuesdays [1] - The author has a background in history/political science and an MBA with a specialization in Finance and Economics [1] Group 2 - The author has been investing since 2000 and is currently the CEO of an independent living retirement community in Illinois [1]

Group 1 - Citigroup's third-quarter profit fell due to increased credit losses and reserves for bad loans, leading to a decline in shares [1] - Net income decreased by 9% year-over-year to $3.24 billion, or $1.51 per share, although it exceeded analyst estimates [1] - Revenue, net of interest expense, rose by 1% to $20.32 billion, also surpassing expectations [1] Group 2 - The cost of credit increased to $2.7 billion from $1.8 billion in 2023, primarily driven by higher credit card losses and a rise in the allowance for credit losses, which grew to $22.1 billion from $20.2 billion [1] - Revenue growth was noted across all business segments except "all other," with the investment banking unit showing a significant 31% increase to $934 million [1] - CEO Jane Fraser emphasized that the results indicate the bank is moving in the right direction, with positive operating leverage, share gains, and fee growth [2]

Core Viewpoint - Citigroup reported a revenue of $20.32 billion for Q3 2024, showing a year-over-year increase of 0.9% and exceeding the Zacks Consensus Estimate by 2.05% [1] Financial Performance Metrics - Earnings per share (EPS) for the quarter was $1.51, slightly down from $1.52 a year ago, but surpassed the consensus estimate of $1.34 by 12.69% [1] - Book value per common share was $101.91, exceeding the average estimate of $100.80 [2] - Efficiency Ratio stood at 65.2%, better than the estimated 67.3% [2] - Net Interest Margin (FTE) was reported at 2.3%, slightly below the estimated 2.4% [2] - Average balance of total interest-earning assets was $2,282.12 billion, above the estimate of $2,276.26 billion [2] Revenue Breakdown - Markets Revenues, net of interest expense, reached $4.82 billion, surpassing the average estimate of $4.59 billion [2] - Equity Markets revenue was $1.24 billion, significantly higher than the estimated $983.36 million [2] - Fixed Income markets revenue totaled $3.58 billion, slightly below the estimate of $3.61 billion [2] - US Personal Banking Revenues, net of interest expense, were $5.05 billion, lower than the average estimate of $5.14 billion [2] - Services Revenues, net of interest expense, amounted to $5.03 billion, exceeding the estimate of $4.73 billion [2] - Corporate/ALL OTHER Revenues Managed Basis (net of interest expense) was $1.83 billion, below the average estimate of $2.13 billion [2] - Treasury and Trade Solutions revenue totaled $3.64 billion, above the estimate of $3.51 billion [2] - Securities Services revenue was $1.39 billion, higher than the estimated $1.22 billion [2] Stock Performance - Citigroup shares have returned +13.1% over the past month, outperforming the Zacks S&P 500 composite's +4.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - Total revenues for Q3 2024 were $20,315 million, representing a 1% increase from Q2 2024 and a 1% increase from Q3 2023[2]. - Net income attributable to Citigroup for Q3 2024 was $3,273 million, a decrease of 1% from Q2 2024 and a decrease of 9% from Q3 2023[2]. - Diluted earnings per share for Q3 2024 were $1.51, a decrease of 1% from Q2 2024 and a decrease of 7% from Q3 2023[2]. - Total revenues for Q3 2023 were $34,837 million, with a net interest income (NII) of $13,828 million, reflecting a 1% increase in revenues from Q2 2024[4]. - Net income for Q3 2024 was $3,238 million, a 1% increase from Q3 2023[6]. - Nine months 2024 net revenues were $61,558 million, reflecting a 1% increase compared to the same period in 2023[6]. Credit Losses and Provisions - Net credit losses (NCLs) for Q3 2024 were $2,172 million, a decrease of 5% from Q2 2024 but an increase of 33% from Q3 2023[2]. - The provision for credit losses on loans was $1,816 million in Q3 2023, a 31% increase from the previous quarter[4]. - Total provisions for credit losses and benefits and claims were $1,840 million in Q3 2023, reflecting an 8% increase from the previous quarter[4]. - Net credit losses on loans were $1,637 million in Q3 2023, a 5% decrease from Q2 2024[4]. - Net credit losses on loans were $29 million in 2023, with a significant increase to $66 million in 2024, marking a 124% rise[9]. Operating Expenses - Total operating expenses for Q3 2024 were $13,250 million, reflecting a 1% decrease from Q2 2024 and a 2% decrease from Q3 2023[2]. - Operating expenses for Q3 2023 totaled $13,511 million, which is a 1% decrease from Q2 2024[4]. - Total operating expenses decreased by 1% from $1,225 million in 2023 to $1,179 million in 2024[9]. Assets and Liabilities - Total assets as of Q3 2024 were $2,430.7 billion, reflecting a 1% increase from Q2 2024[2]. - Total liabilities increased by 1% to $2,158,282 million, with long-term debt rising by 7% to $275,760 million[5]. - Total average interest-earning assets increased to $2,282,116 million in 3Q24, up from $2,256,924 million in 2Q24, reflecting a growth of approximately 1.1%[17]. Capital Ratios and Equity - Common Equity Tier 1 (CET1) Capital ratio for Q3 2024 was 13.7%, an increase from 13.59% in Q2 2024[2]. - Citigroup common stockholders' equity increased to $192,796 million as of September 30, 2024, up from $190,283 million in June 2024[27]. - Total Tier 1 Capital reached $175,788 million as of September 30, 2024, an increase from $173,783 million in June 2024[27]. - Book value per share increased to $101.91 as of September 30, 2024, compared to $99.70 in June 2024[27]. Revenue Segments - Services revenue for Q3 2024 was $5,028 million, up 7% compared to Q3 2023[6]. - Banking revenue increased by 16% year-over-year, reaching $1,597 million in Q3 2024[6]. - Wealth revenue saw a significant increase of 10%, totaling $2,002 million in Q3 2024[6]. - Total non-interest revenues for the nine months ended September 30, 2023, were $19,946 million, a 6% increase compared to the same period in 2022[4]. Efficiency and Profitability - The efficiency ratio improved to 54% in Q3, down from 57% in the previous quarter, maintaining a year-to-date efficiency ratio of 55%[7]. - The efficiency ratio improved from 89% in 2023 to 68% in 2024, indicating enhanced operational efficiency[9]. - Return on Tangible Common Equity (RoTCE) for Q3 was 23.1%, up from 13.6% in the previous quarter, with a year-to-date RoTCE of 22.4%[7]. Deposits and Loans - Total deposits for Q3 2024 were $1,310.0 billion, a 2% increase from Q2 2024[2]. - Total loans for Q3 2024 were $688.9 billion, remaining stable compared to Q2 2024[2]. - Total consumer loans increased by 3% year-over-year, reaching $389.2 billion in Q3 2024[18]. - Average loans by reporting unit remained stable at $83 billion, with a slight increase of 6% compared to the previous quarter[7]. Non-Performing Loans - Non-Performing Loans (NCLs) as a percentage of total average loans improved by 28 basis points year-over-year, standing at 1.26% in Q3 2024[18]. - The allowance for credit losses on loans (ACLL) as a percentage of NAL was 538%, indicating a strong coverage ratio[25]. - The company reported a significant decrease in non-accrual loans from the previous year, with a 52% reduction in total non-accrual loans[25].

分组1 - Citigroup reported quarterly earnings of $1.51 per share, exceeding the Zacks Consensus Estimate of $1.34 per share, and showing a slight decrease from $1.52 per share a year ago, adjusted for nonrecurring items [1] - The company achieved a revenue of $20.32 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.05%, and an increase from $20.14 billion year-over-year [1] - Citigroup has consistently surpassed consensus EPS estimates in the last four quarters, achieving an earnings surprise of 12.69% this quarter [1][3] 分组2 - The stock has gained approximately 28.3% since the beginning of the year, outperforming the S&P 500's gain of 22.9% [2] - The current consensus EPS estimate for the upcoming quarter is $1.29 on revenues of $19.56 billion, and for the current fiscal year, it is $5.75 on revenues of $80.68 billion [4] - The Zacks Industry Rank for Banks - Major Regional is in the top 25% of over 250 Zacks industries, indicating a favorable outlook for the sector [5]

Core Viewpoint - Citigroup is expected to report its third-quarter earnings, providing insights into CEO Jane Fraser's turnaround strategy, with analysts projecting earnings per share of $1.31 and revenue of $19.84 billion [1] Group 1: Earnings Expectations - Analysts anticipate earnings per share of $1.31 for the third quarter [1] - Projected revenue for the quarter is $19.84 billion [1] Group 2: Management and Strategy - CEO Jane Fraser has been focused on streamlining Citigroup since taking over in March 2021, which includes reducing the bank's global footprint and workforce [1] Group 3: Performance Highlights - Investment banking and equities trading were noted as strong areas for Citigroup in the second quarter [1] - Citigroup's shares have increased by over 28% year-to-date, outperforming both the S&P 500 and the financial sector [1]