NEW YORK (AP) — Citigroup said its earnings fell slightly in the third quarter after a $1 billion drop in revenue from its bond trading business and a slump in mortgage refinancing.
THE NUMBERS: Net income for the July-to-August period fell to $3.26 billion from $3.27 billion in the same period a year ago after excluding an accounting gain and other one-time items. The earnings amount to $1.02 per share compared with $1.06 per share last year.
Revenue fell to $18.2 billion compared with $19.2 billion a year ago.
THE DETAILS: The bank said that "significantly lower" mortgage refinancing business in the U.S. contributed to a 7 percent decline in Citi's consumer banking revenue. Rising interest rates in the second quarter made it less attractive for consumers to refinance their mortgages.
The rising rates also hurt Citi's securities and banking unit. Revenues at Citi's bond trading unit slumped 26 percent in the third quarter, to $2.8 billion from $3.7 billion as bond yields climbed. Rates rose in anticipation that the Federal Reserve would start reducing the bond purchases that has been making to stimulate the economy.
Debt underwriting and advisory revenue also slumped.
THE MARKET REACTION: Citigroup's stock fell 19 cents, or 0.4 percent, to $49.41 in morning trading. Wall Street analysts who follow the stock had predicted earnings of $1.05 for the quarter, according to data provider FactSet.
THE DEFAULT THREAT: Citigroup remains "hopeful" that lawmakers in Washington will be able to avert a potential U.S. default, said John Gerspach, Citi's Chief Financial Officer, on a call with reporters. The bank has been preparing for different contingencies over recent weeks and no longer holds any U.S. Treasury securities that mature on the Oct. 31, or earlier, the executive said.
Most Popular Stories
- Cape Cod Building Mussel Industry
- Hollywood Eager to Grasp Hispanic Market
- Frightfully Fun Films Return for Halloween
- Sears Denies Store Closings, Layoffs Report
- Microsoft Beats Income Expectations
- Would Soccer Be Richer Without Small Clubs?
- Cloud Lifts Microsoft's Quarterly Results
- Pfizer Approves $11 Billion Buyback Plan
- IS Funded by Black Market Oil Sales, Racketeering
- Weekly Jobless Claims Rise but Remain Low