Citi (NYSE:C) group has celebrated a rise in its shares on Tuesday, after the bank released third quarter results that seemed to have risen much higher than expected. It also announced cutting down business in 11 of its international markets, as their potential to grow and generate profits has been questioned. Another separate announcement disclosed a fraud that was uncovered in the Mexican branch of Banamex, an investigation into which is underway.
Reports on Tuesday recorded $19.97 billion revenue in its third quarter, with a 10 percent increase since last year. The net income for the quarter rounded up to $3.67 billion, which was a 13% increase, in comparison to the same period last year. It even demonstrated per share earnings of $1.15, which is 3% higher than the analyst’s prediction.
Among the list of special bonuses is the $474 million one-time pre-tax charge. The net income for third quarter was rounded up to $3.4 billion, with per share earnings of $1.07. Revenues attained through these one-time charges were $19.6 billion.
According to a public statement issued by Michael Corbat, Citi (NYSE:C)’s CEO on Tuesday, it was emphasized how well Citi (NYSE:C) bank has done as a consumer bank and institutional business, generating revenues above expectations.
An overseas preview showed a $9.6 billion in revenue, which progressed by 4% since last year. Regions, such as North America, Latin America and Asia contributed to this profit and hence are considered as markets with greatest scale and growth potential. Citi (NYSE:C) now plans to shift its focus in these regions and plans to withdraw consumer banking business from the regions that generate lesser profits, such as Costa Rica, Guatemala, Hungary and Japan. These franchises are expected to be sold off by the end of 2015, leaving only 24 Citi (NYSE:C) functional franchises. These 24 markets are the ones that generate 95% of its revenue.
According to Manuel Medina-Mora, Citi (NYSE:C)’s co-president and the CEO of global consumer banking, this shift allows us to focus primarily on the top 100 Citi (NYSE:C) franchises and emerging markets where we expect the greatest profit and growth potential. There will be more focused application and strategies that are effectively planned and aligned with the particular regions.
In a different statement, also released on Tuesday, Corbat revealed an investigation that is underway in Banamex, Mexico. A fraud and embezzlement of $15 million has been reported. The business has been scattered and for the time being, Banamex’s services are being provided through Citi (NYSE:C)’s global security unit. Corbat further emphasized that the bank is expected to take whatever extreme measures are required to ensure the individuals responsible pay for their misconduct, and the global franchise continues living up to its reputation, and hence provide standard services to ensure satisfied client experience.
In the light of these announcements, regarding the third quarter earnings and Banamex investigation, Citi (NYSE:C) shares rose in the Tuesday trading session and have gone up by 2.5%, but the year-to-date stock has fallen by 4.5%.
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