US banking giant Citigroup has reported an
88 per cent plunge in net profit at $468 million in the
July-September quarter, due to $4.7 billion loss related to the joint venture brokerage business, Morgan Stanley Smith Barney.
Citi said excluding the loss on its brokerage unit, a one-time accounting charge and credit adjustments, the bank reported earnings of $3.27 billion in the quarter under review, up from $2.57 billion in the period a year earlier.
In the year-ago period, the bank had a net profit of $3.77 billion, Citigroup said in a statement.
The banking entity's total revenues fell 33 per cent from the year-ago period to $13.95 billion in third quarter of this year.
"Third quarter results also included a pre-tax loss of $4.7 billion ($2.9 billion after-tax) from the previously announced sale of a 14 per cent interest and other than temporary impairment of the carrying value of Citi's remaining 35 per cent interest in the Morgan Stanley Smith Barney (MSSB) joint venture," Citi said.
Investment-banking revenue rose 26 per cent to $926 million, with increases in fees from underwriting shares and bonds and advising on mergers.
Besides, Citi saw a 67 per cent surge in profits from its securities and banking unit to $1.61 billion. The bank said it benefited from an uptick in capital market activities.
"Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues. These earnings highlight the strength of Citicorp and its diversification by product and region,"
CEO Vikram Pandit said.
"For the third straight quarter, we had positive operating leverage in each of our three core businesses. Citigroup in total also had positive operating leverage as Citi Holdings had a smaller impact on our overall results," he added.
Citi's revenues rose by 2 per cent from global consumer banking operations, while revenues from transaction services were down 2 per cent.
Last month, Citi agreed to sell its stake in the brokerage to Morgan Stanley.
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