Citigroup has posted rising profits for the third quarter as it benefited from an accounting gain, but saw its underlying revenues fall eight per cent.
The investment bank generated net profit of $3.8bn (£2.4bn) in the three months to September, up 74 per cent from the same period in 2010.
Revenues increased to $20.8bn in the quarter, up slightly on 2010, but they included a $1.9bn adjustment for credit valuation that Citi said reflected “the widening of Citi's credit spreads during the third quarter.”
Without that gain, revenues were down eight per cent from 2010’s level, at $18.9bn. The profits including the CVA charge beat analyst expectations, but it is not yet clear whether the underlying profit would.
The bank said the revenue fall “was driven by lower revenues in both Citicorp and Citi Holdings” and particularly the lower revenues in its securities and banking division.
Performance was also held up by increased revenues in its regional consumer banking division.
It also benefited from a $1.4bn release of credit reserves from previous years, and a $2.6bn improvement in the cost of credit, it said.
The bank added that its net credit losses from bad loans had fallen 41 per cent compared with 2010, to $4.5bn, as borrowers repaid more debt.
“Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results. We continued to manage our risk prudently while growing the businesses that are core to our strategy,” said chief executive Vikram Pandit.