Citigroup (C) reported mixed earnings for the fourth quarter on Monday, but Citigroup's shares led in the first quarter to revive bank stocks to signify improvements in bond trading.
Estimates: Wall Street expected Citigroup's earnings per share to be 21% at $ 1.55. The streets recorded revenues of up to 1% to 17.48 billion dollars.
Result: Citigroup's profit of $ 1.61 per share in revenue of $ 17.12 billion. In spite of weak earnings, Citigroup's earnings were still relatively clear, with a 4% rise in costs that led to a 6% drop in compensation.
Banking revenue for consumers was $ 8.44 billion, as retail lending and market revenues from North American card markets were flat. Yields from fixed earnings and sales declined by 21% to $ 1.9 billion, while equity sales grew 18% to $ 668 million. Revenue from investment banking fell 1 percent to $ 1.3 billion, while private bank revenues rose 3 percent to $ 797 million.
But on a conference call, Chief Financial Officer John Gerspach indicated an improvement in bond trading this year.
"Volatility moderately moderated and both prices and yields showed signs of stabilization," he said. "But again it is really early, and the market conditions – even if they have improved – have fully recovered at this time."
Citigroup Stock, bank stocks
Citigroup shares on the stock market jumped 4.2% to 59.06, and almost returned to a 50-day deal after it collapsed. Shares are somewhat gathered from Christmas Eve together with the stock market, but that's after the trends were down nearly all 2018. relative strength, which tracks stock performance against the S & P 500, fell from October 2017 to the end of December, almost dropping to 2016.
Other bank stocks also reversed initial losses. JPMorgan Chase (JPM) increased by 0.9% American Bank (BAC) grew by 1.6% Wells Fargo (WFC) advanced by 0.8%.
Goldman Sachs (GS) rose by 1.8% a Morgan Stanley (MS) advanced by 2%.
The news of JPMorgan and Wells Fargo Tuesday, BofA and Goldman are on Wednesday, and Morgan Stanley reports Thursday.
Global stress at bank events
Banking stocks fell to the final at the end of 2018, amid worries about recession, credit growth, which was too sluggish for Wall Street and proportional to yield on interest rates. Four increases in Fed rates in 2018, which forced banks to pay more for one-day loans to meet cash cushion quotas, also eliminated bank profits.
As investors rose to the brink, others feared the impact on banks' investment banking. Trade revenues are expected to be weak.
Citigroup is more exposed to international affairs than competing banks. Chief Financial Officer Gerspach said last month that the global economy remains solid with concerns about trade tensions, Chinese economic growth, Brexita and shocks elsewhere in Europe.
"When we look at the macroeconomic environment, the fundamentals still look pretty good, and I think there is a great deal of disconnection between market technology and what we really see on the ground," he said.
The company is more exposed to Asia, along with Mexico and Latin America – where Venezuela and Brazil are facing political changes and damaged economies – than Europe
"We have not seen any real credit problems yet," said Fred Cannon, research director Keefe, Bruyette & Woods, of a stir in Latin America during a talk Friday. "But I would say that such riots, there are potential credit problems.
"Nevertheless, it is important to realize how strong Citi's balance is compared to the previous financial crisis," he said. "He has five times more capital than they are."
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