A rebound in investment banking and equity trading boosted third quarter profits at Wall Street giant Citigroup.
The American investment bank’s profits hit $4.6bn in the last three months, up sharply from $3.1bn in the same period last year.
The surge in profits was primarily driven by the strong performance of its investment banking division, which notched a 39 per cent uplift in income, hitting $1.9bn, up from $1.3bn last year.
A resurgence in its equity trading arm fed into the bumper set of earnings, with revenue climbing 40 per cent $1.2bn.
Earnings per share, a key measure of a company’s profitability, hit $2.15. Citi’s common equity tier one ratio, an indication of the strength of a bank’s balance sheet, was flat at 11.7 per cent.
The global economic rebound from the depths of the Covid-19 crisis has nursed consumer and investor sentiment back toward pre-pandemic health, which has engineered more favourable trading conditions for Wall Street’s biggest banks.
Jane Fraser, Citi chief executive, said, “The recovery from the pandemic continues to drive corporate and consumer confidence and is creating very active client engagement as you can see through our strong results in investment banking and equity markets.”
The US bank was also boosted by the release of $1.1bn of loan loss reserves set aside to cope with an expected wave of defaults triggered by the pandemic.