Citigroup (C) Tops Q3 EPS by 8c

October 14, 2016 7:59 AM EDT

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Citigroup (NYSE: C) reported Q3 EPS of $1.24, $0.08 better than the analyst estimate of $1.16. Revenue for the quarter came in at $17.8 billion versus the consensus estimate of $17.34 billion.

Third quarter 2015 included CVA/DVA4 of $196 million ($127 million after-tax). Excluding CVA/DVA in the prior year period, revenues decreased 4% from the prior year period, and earnings per diluted share decreased 5% from $1.31 per diluted share in the prior year period.

Citi CEO Michael Corbat said, “I am very encouraged by the underlying momentum across our franchise, notably in several areas where we have been investing. In the quarter, both our Global Consumer Bank and Institutional Clients Group had solid year-over-year revenue increases in nearly every business line and geography. We also continued to grow core loans and deposits while reducing non-core assets to just 3% of our balance sheet.

“We remain intensely focused on shareholder returns. The acquisition of the Costco portfolio and the recently announced sales of our retail operations in Argentina and Brazil are the latest examples of how we are shifting resources to the areas we believe will generate the best returns for our shareholders.

“Our Common Equity Tier 1 ratio increased to 12.6% and we remain committed to consistently increasing the amount of capital we return to our shareholders in order to improve overall returns. In the past two years, we have lowered the amount of outstanding common shares by 180 million or 6%. Our Tangible Book Value per share increased to $64.71 in the quarter, an 8% increase from one year ago, reflecting both the impact of these stock repurchases and our efforts to deliver quality and consistent earnings,” Mr. Corbat concluded.

Citigroup’s allowance for loan losses was $12.4 billion at quarter end, or 1.97% of total loans, compared to $13.6 billion, or 2.21% of total loans, at the end of the prior year period. Total non-accrual assets of $6.1 billion fell 8% from the prior year period. Consumer non-accrual loans declined 26% to $3.6 billion. Corporate non-accrual loans of $2.4 billion increased $837 million from the prior year period, mostly related to energy-related loans in the Institutional Clients Group (ICG), but decreased 2% from the prior quarter.

Citigroup’s loans were $638 billion as of quarter end, up 2% from the prior year period, and up 3% in constant dollars. In constant dollars, 7% growth in Citicorp loans was somewhat offset by continued declines in Citi Holdings, driven primarily by continued reductions in the North America mortgage portfolio.

Citigroup’s deposits were $940 billion as of quarter end, up 4% both on a reported basis and in constant dollars. In constant dollars, Citicorp deposits increased 5%, driven by a 4% increase in ICG deposits and a 5% increase in Global Consumer Banking (GCB) deposits. In constant dollars, Citi Holdings deposits declined 37%, driven by divestiture activity.

Citigroup’s book value per share was $74.51 and tangible book value per share was $64.71, each as of quarter end, both representing 8% increases. At quarter end, Citigroup’s Common Equity Tier 1 Capital ratio was 12.6%, up from 11.7% in the prior year period. Citigroup’s Supplementary Leverage Ratio for the third quarter 2016 was 7.4%, up from 6.9% in the prior year period. During the third quarter 2016, Citigroup returned a total of approximately $3.0 billion of capital to common shareholders in the form of dividends and repurchases of approximately 56 million common shares.

For earnings history and earnings-related data on Citigroup (C) click here.

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