Citigroup earnings beat expectations thanks to strong investment bank

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January 14 (Reuters)Citigroup Inc. NC on Friday posted a 26% drop in fourth-quarter profit, but beat market expectations as strong gains in its investment banking business cushioned the blow from higher spending.

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

Analysts on average had expected earnings of $1.38 per share, according to Refinitiv IBES data.

Citigroup’s investment banking arm had a strong quarter on the back of a frenzy of mergers and acquisitions activity. Institutional Clients revenue increased 4%, driven by a 43% increase in investment banking fees.

It helped offset losses from higher spending as the bank continues to wind down the last of its consumer businesses outside the US as part of Chief Executive Jane’s ‘strategy refresh’ Fraser.

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

With the deal, the bank announced divestiture plans for seven of the 13, mostly Asian, consumer businesses Fraser said would be shelved in April.

“We have made the final decision regarding updating our strategy with respect to the markets we intend to exit,” Fraser said in a statement.

The bank has incurred higher costs for several quarters to fix problems identified by regulators in its control systems, leading investors to wonder how much money and how long the fixes will take.

In the fourth quarter, the bank’s operating expenses jumped 8%, excluding the impact of divestments in Asia.

Total revenue increased 1% year over year to $17 billion.

(Reporting by Niket Nishant in Bengaluru and David Henry in New York; Editing by Aditya Soni)

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