Citigroup (C) shares rose 2.6% in pre-market trading after the bank beat earnings expectations and continued to shore up its balance sheet.
Citigroup posted $1.23 in EPS on $20.8 billion. That eclipsed analysts’ expectations of 82 cents of EPS and 19.3 billion in revenue.
Like JPMorgan Chase (JPM), Citi benefited from a change in the value of its liabilities, as its credit spreads widened. The change accounted for $1.9 billion of revenue, or 38 cents of EPS. Without the change, Citi would have posted 85 cents of EPS, still beating expectations.
Revenue fell year over year: “The decline was largely due to lower revenues in Securities and Banking, which were 12% below the prior year period and more than offset 2% growth in RCB revenues and 7% growth in Transaction Services revenues from the prior year period.”
CEO Vikram Pandit wrote in an internal memo to employees that he expects economic weakness to continue, but that Citi will be able to persevere.
“These are tough times for most economies and for millions of people.� Macro improvement is not likely to come any time soon.� Our company has the right strategy and mix of assets to help our clients and customers weather these times and to see us through to better days ahead.”
Pandit also noted the bank has kept whittling away at its Citi Holdings assets:
“We continued to reduce Holdings assets, which now stand at only 15% of our balance sheet, down from nearly 20% at the beginning of the year.”
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