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Citigroup’s earnings will exceed expectations on a strong investment bank

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() – Citigroup Inc. announced on Friday that fourth-quarter earnings fell 26%, but the market exceeded expectations as strong gains in its investment banking business eased the blow from higher costs.

FILE PHOTO: The Citi Bank logo is displayed at an exhibition hall in Bangkok, Thailand, May 12, 2016. / Athit Perawongmetha

In the quarter ended Dec. 31, the bank’s profit fell to $ 4.3 billion from a year earlier, or $ 1.92 per share to $ 3.2 billion, or $ 1.46 per share. Excluding the impact of the costs of the divorce in Asia, the bank earned $ 1.99 per share.

According to Refinitive IBES, analysts had expected an average profit of $ 1.38 per share.

Citigroup’s investment banking division had a strong quarter due to anger in mergers and acquisitions. The income of the institutional client group increased by 4%, which is explained by a 43% increase in investment bank payments.

This helped the bank offset losses from high costs as CEO Jane Fraser continued to shut down end-user businesses outside the United States as part of a “strategy update”.

Citigroup said earlier on Friday that it had agreed to sell its consumer businesses in Indonesia, Malaysia, Thailand and Vietnam to Singapore-based United Overseas Bank.

With the deal, the bank announced plans to eliminate seven of the 13 Asian consumer businesses that Fraser said it would give up in April.

“We have made the final decision to update our strategy because it applies to the markets we want to exit,” Fraser said in a statement.

The bank has incurred more costs to address issues identified by regulators over the past few quarters, leading to questions about how much money and time investors will need for the measures.

In the fourth quarter, the bank’s operating expenses rose 8 percent, excluding the impact of divorces in Asia.

Total revenue rose 1 percent year-on-year to $ 17 billion.

Interviews by Nicket Nishant in Bengaluru and David Henry in New York; Edited by Aditya Soni

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