REUTERS: Citigroup Inc reported a better-than-expected quarterly profit on Friday, helped by lower expenses, higher bond trading revenue and strength in its consumer banking business in Mexico.
Investors have been waiting to see how trading revenue fared at the five big Wall Street banks due to an escalating U.S-China trade war and executives warning that the business's growth would be muted.
Citigroup reported a 9 percent jump in bond trading revenue, outperforming bigger rival JPMorgan Chase & Co , which reported a 10 percent drop in fixed-income trading revenue.
Chief Financial Officer John Gerspach, who plans to retire next year, had previously said Citigroup expected total fixed income and trading revenue to be "flat to slightly higher" in the third quarter.
The bank's shares rose 2.4 percent to US$70.20 in early trading.
Citigroup reported a 2 percent rise in global consumer banking revenue. The bank recently restructured its U.S. consumer business to operate more like those in Asia and Mexico, where it has been seeing better results.
Consumer banking revenue in Latin America rose 20 percent, including a gain on the sale of an asset management business in Mexico. Excluding that gain, revenue rose 8 percent on a constant currency basis, boosting global consumer banking revenue 3 percent.
North America branded card business reported a 3 percent drop in revenue, largely due to the sale of the Hilton hotels portfolio.
Excluding the sale, total net interest revenue from the business was US$1.88 billion, up 5 percent from the second quarter and 3 percent from a year earlier.
The card business has been a cause for concern among investors and the Wall Street bank has been looking to improve its performance.
Net income for the third-largest U.S. bank by assets rose to US$4.62 billion in the third quarter ended Sept. 30, from US$4.13 billion a year earlier.
Earnings per share rose to US$1.73 from US$1.42, helped by buybacks that reduced shares outstanding by 8 percent from a year earlier.
Analysts on average had expected earnings per share of US$1.69, according to I/B/E/S data from Refinitiv.
Total revenue was slightly lower at US$18.39 billion, from US$18.42 billion a year earlier.
Operating expenses fell 1 percent to US$10.31 billion and the company's widely watched efficiency ratio improved to 56.1 percent from 56.6 percent a year earlier.
Citigroup's provision for income taxes fell by US$395 million following changes in the U.S. tax code, which reduced the bank's tax rate to 24 percent in the quarter from 31 percent a year earlier.
The bank's return on tangible common equity was 11.3 percent in the quarter, inching closer to Chief Executive Officer Mike Corbat's goal of 13.5 percent in 2020.
Up to Thursday's close, Citi shares have lost 8 percent of their value for the year, compared with a 5 percent drop in the broader KBW Bank Index .
(Reporting by Siddharth Cavale in Bengaluru; Editing by Sriraj Kalluvila)