Citigroup profit drops 9.0 per cent

Citigroup's profit fell 9 per cent in the third quarter as it set aside more money to cover the risk of loan defaults, particularly on credit cards, reports Reuters.

The third-largest US lender's net income dropped to $3.2 billion, or $1.51 per share, compared with $3.5 billion, or $1.63 per share, a year earlier, it reported on Tuesday.

Revenue rose 1 per cent to $20.3 billion.

Citi's dealmakers joined rivals at JPMorgan Chase and Wells Fargo in benefiting from a rebound in capital markets as corporate clients issued more debt and equity.

Investment banking was a bright spot for the second straight quarter, with revenue jumping to $934 million. Wall Street executives are optimistic that the Federal Reserve's interest-rate cut last month will pave the way for more deals and initial public offerings.

Services revenue climbed 8 per cent to $5 billion, fueled by a 24 per cent surge in revenue for securities services to $1.4 billion.

A stock-market rally at the end of the quarter propelled equities trading revenue up 32 per cent to $1.2 billion, lifting overall markets revenue 1 per cent.