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Cash equities, underwriting help Citi to Q3 earnings beat

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Citigroup FICC Trading Revenue Matches 3Q Estimates

The results beat analysts' expectations, who were looking for $1.32 per share, according to FactSet.

"We all would anticipate greater loan growth if there was a bit more clarity as far as you know when or if tax reform was going to pass", Gersprach said.

Both JP Morgan Chase and Citigroup reported higher third quarter profits, despite being hit by a drop in bond trading revenues. At $1.42 a share, earnings topped the consensus estimate of Wall Street analysts of $1.32 a share. Analysts were expecting the company to report earnings per share of $1.32 on revenue of $17.90 billion for the quarter. Citi's institutional client group, which contains its trading desks and investment bank, had net income of $3.04 billion compared with $2.64 billion in the same period a year earlier.

Last month, Gersprach warned that overall trading revenue would fall by 15 percent, worse than the 11 percent drop that materialized.

FILE PHOTO: A view of the exterior of the Citibank Corporate headquarters in the Manhattan borough of New York City, May 20, 2015.

The bank's worldwide consumer business saw an 8% rise in revenue, driven by higher loans and deposit volumes growth, Citi said.

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Other major financial companies slated to report this week include Bank of America and Wells Fargo. Citigroup's shares have had a strong run-up this year, climbing 26 percent partly due to its share buyback plan. JPMorgan's net interest income, or the difference between what it pays for funds and collects from lending them out, rose 10 percent.

Executives at the largest USA bank touted the diverse mix of businesses that allow JPMorgan to weather a dip in one area or another, and downplayed a 27 percent drop in bond trading revenue even though weakness has continued into the fourth quarter.

Citigroup this year has been ratcheting up its expectations for soured loans for its two North American credit card businesses, Citi-branded cards and cards issued for stores.

Citigroup fell 3.4 per cent despite reporting a seven percent rise in profits to US$4.1 billion.

Analysts on Citi's earnings call questioned when the incentives would end and investors would start to see a return.

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