Citigroup, Wells Fargo profits record double-digit growth

New York: As the Occupy Wall Street protest entered its second month yesterday, two of the United States' largest banks, Citigroup and Wells Fargo & Co, announced double digit growth in profits.

Citigroup, the third-largest US bank by assets, reported net income of $3.77 billion (Dh13.8 billion), or $1.23 per share, up from $2.17 billion, or 72 cents per share, in the same quarter last year. The bank also recorded an accounting gain banks can take in turbulent markets.

The third-quarter results included a pre-tax gain of $1.9 billion, or 39 cents per share after taxes, due to the bank's widening credit spreads during the quarter.

Accounting gain

When a bank's debt weakens relative to US Treasuries, it can record an accounting gain because it could profit from buying back debt.

Excluding that gain, Citi earned $2.6 billion, or 84 cents per share. Revenue at the bank's continuing securities and banking business fell 12 per cent excluding the debt value adjustment, to $4.84 billion, hurt by declining underwriting and merger advisory fees.

Overall operating expenses for Citigroup rose 8 per cent from a year earlier. Operating expenses were $12.46 billion and have been hovering around that level since the fourth quarter of 2010.

Wells Fargo & Co yesterday said that its third-quarter profit jumped 21 per cent, as write-offs of bad loans dropped while deposits grew.

Wells Fargo & Co missed Wall Street earnings estimates by a penny a share as interest income was weaker than expected, a rare misstep for the fourth-biggest US bank.

The San Francisco-based bank said that its net income rose to $4.06 billion, or 72 cents per share, for the three months ended September 30.