NEW YORK, Oct. 15 (UPI) -- Citigroup Inc., the nation's largest financial services firm, said it third-quarter net income rose to $3.92 billion, or 76 cents a share, from $3.18 billion, or 61 cents a share during the same period last year.
The lender, which is being investigated for alleged conflicts of interest between its research and investment banking units said its core earnings, which excludes a number of items, totaled 74 cents a share.
On that basis, analysts on Wall Street had expected Citigroup to post a net income of 73 cents a share, according to Thomson First Call.
Sanford I. Weill, chairman and chief executive officer, said, "We are exceptionally pleased with the performance of our businesses this quarter, during what has been a period of challenging business conditions.
"We generated double-digit income growth while continuing to strengthen our reserves and capital position and reduce costs. Our revenues increased by 10 percent while our expenses fell by 2 percent," Weill said.
"Further, this strong performance took place against the backdrop of macroeconomic challenges in Argentina and the political uncertainty in Brazil, which negatively impacted our results, as well as exceptionally weak equity markets, which have reduced the value of our proprietary investment portfolio and led to further realized losses in the insurance portfolios," Weill said.
Citigroup said its revenues grew 10 percent, while expenses declined 2 percent. The lender said its Global Consumer business continued to extend its franchise with income rising 13 percent in the quarter.
Expense reductions reflected a continuing focus on reducing controllable expenses across the company, including lower headcount and compensation levels in the Global Corporate and Investment Bank, further operating and technology expense reductions in Global Transaction Services, and improving operating leverage in Global Investment Management.
Citigroup said it built its reserve for loan losses by $283 million in excess of net credit losses in the third quarter, increasing the total reserve for loan losses to $10.7 billion.
Credit costs remained high in Citigroup's Global Corporate and Investment Bank. Corporate cash basis loans increased $252 million, or 6 percent, from the second quarter.
The Global Consumer net credit loss rate declined 16 basis points from the second quarter, to 3.18 percent, largely reflecting improvements in the company's CitiCards portfolio. However, consumer delinquencies increased slightly from the second quarter.
