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Citigroup (C) Up 7.2% Since Last Earnings Report: Can It Continue?
CCiti(C) ZACKS·2024-11-14 17:35

Core Viewpoint - Citigroup's third-quarter 2024 earnings report showed a mixed performance with a notable increase in Investment Banking revenues, but a decline in net income and net interest income, raising questions about future performance leading up to the next earnings release [2][3][4]. Financial Performance - Adjusted net income per share was 1.51,exceedingtheZacksConsensusEstimateof1.51, exceeding the Zacks Consensus Estimate of 1.34, but down 0.7% from the previous year [2]. - Total revenues increased by 1% year over year to 20.32billion,surpassingtheZacksConsensusEstimateof20.32 billion, surpassing the Zacks Consensus Estimate of 19.90 billion [4]. - Investment Banking revenues rose 31% year over year, primarily due to strength in Debt Capital Markets [3]. Revenue and Expense Analysis - Net Interest Income (NII) fell 3% year over year to 13.36billion,whileNetInterestRevenue(NIR)increased1013.36 billion, while Net Interest Revenue (NIR) increased 10% to 6.9 billion [5]. - Operating expenses decreased by 2% year over year to 13.25billion,attributedtoorganizationalsimplificationandcostreductions[5].SegmentPerformance−Servicessegmentrevenueswere13.25 billion, attributed to organizational simplification and cost reductions [5]. Segment Performance - Services segment revenues were 5.02 billion, up 8% year over year, driven by Securities Services and Treasury, and Trade Solutions [6]. - Banking revenues increased 16% year over year to 1.59billion,mainlyduetogrowthinInvestmentBanking[7].−Wealthsegmentrevenuesrose91.59 billion, mainly due to growth in Investment Banking [7]. - Wealth segment revenues rose 9% year over year to 2 billion, supported by higher investment fee revenues [8]. Balance Sheet and Credit Quality - Total deposits increased by 2% to 1.31trillion,whileloansrosemarginallyto1.31 trillion, while loans rose marginally to 689 billion [9]. - Non-accrual loans decreased by 34% year over year to 2.20billion,butprovisionsforcreditlossesrose452.20 billion, but provisions for credit losses rose 45% to 2.67 billion [10]. Capital Position and Deployment - Common Equity Tier 1 capital ratio was 13.7%, up from 13.6% in the previous year [11]. - The bank returned 2.1billiontoshareholdersthroughdividendsandsharerepurchases[12].FutureOutlook−ForQ42024,managementexpectsNII(excludingMarkets)toremainflatsequentially[13].−Anticipatedrevenuesfor2024areprojectedtobebetween2.1 billion to shareholders through dividends and share repurchases [12]. Future Outlook - For Q4 2024, management expects NII (excluding Markets) to remain flat sequentially [13]. - Anticipated revenues for 2024 are projected to be between 80-81billion,withaslightdeclineinNII[13].−Medium−termrevenuegrowthisexpectedtoreach81 billion, with a slight decline in NII [13]. - Medium-term revenue growth is expected to reach 87-$92 billion by 2026, with a CAGR of 4-5% [14][15].