Lower legal expenses helped banking leviathan Citigroup (NYSE:C) top expectations with its third quarter results.
With the banks being relatively well behaved of late and no longer permanently in the cross hairs of regulators, legal fees plunged to US$376mln from US$1.6bn the year before, contributing in no small part to a 51% increase in pre-tax profit to US$4.3bn.
Provisions for bad debts declined to US$13.6bn, representing 2.21% of the bank's outstanding loans, from US$16.9bn (2.60%) the year before, suggesting that the economy is either improving, or Citi is getting wiser in its lending.
Revenues fell 5% from the year before to US$18.7bn, roughly in line with analysts' expectations.
The bank's “casino” arm, the trading house, saw revenue fall 16% year-on-year.
Underlying earnings per share of US$1.31 topped market expectations of US$1.28, and represented the third quarter in a row that the bank had surprised the Street in a positive way.
In keeping with his counterparts at rival banks, chief executive Michael Corbat said it was an extremely volatile quarter.
“Our results speak to the resilience of our franchise globally,” he claimed.
Shares were up 2% at US$51.74 in early trading.