Citi’s ‘Unpredictable Q3’ Sees Growth In Treasury Unit

Citigroup had a flat third quarter but reported year-over-year gains in treasury and trade solutions services for that period. The financial institution, however, beat analysts earnings expectations — just barely — in what CEO Michael Corbat called an “unpredictable quarter.”

Citi’s latest financial report comes as the bank is engaged in various hot areas of payments, not the least of which is dealing with — and trying to get ahead of — ongoing shifts in payments, commerce, security and transparency, and giving corporate cash managers an edge when it comes to real-time and instant payments and other areas.

Treasury Growth

For the third quarter of 2019, Citi reported that revenue for its Treasury and Trade Solutions unit increased  6 percent year over year, to $2.4 billion. “[The growth reflects] strong client engagement and growth in transaction volumes, partially offset by spread compression,” the bank said in a statement.

Revenue from the financial institution’s Global Consumer Banking arm hit $8.7 billion for the quarter, pretty much flat when compared with the figure from the same period a year ago. Within that unit, North American revenue increased 4 percent year over year, reaching $5.4 billion. In Latin America, however, revenue decreased 16 percent to $1.4 billion.

“Excluding the gain on sale in the prior period, revenues increased 3%, primarily driven by an increase in cards revenues and improved deposit spreads,” Citigroup said in a statement. Cost of credit for Global Consumer Banking increased 4 percent to $2 billion. “The increase was driven by higher net credit losses, primarily reflecting volume growth and seasoning in Citi-Branded Cards and Citi Retail Services in North America GCB,” the bank said.

Overall, Citigroup revenue reached $18.6 billion in the third quarter of 2019, a 1 percent year-over-year increase. “Excluding the gain on sale, revenues increased 2%, reflecting solid performance across both GCB and ICG, partially offset by Corporate / Other,” the bank said.

Card average loans for the bank increased by 2 percent year over year, while card purchase sales increased by 5 percent in the third quarter of 2019.

Citi APIs and Treasury

Citigroup recently announced its corporate treasury APIs and its CitiConnect API platform have processed more than $26 billion for corporate clients.

In a press release, Citi said the CitiConnect platform has processed more than 157 million API calls since its November 2016 launch. The APIs for Treasury Services connect the bank’s more than 55 corporate clients and their treasurers to integrate a range of Citi’s financial services directly into their treasury and enterprise resource planning platforms.

According to Citi, the majority of the API calls stem from the Asia-Pacific and Europe regions, a reflection of the adoption of real-time payments in these markets. The bank also noted that the number of API calls grew by 750 percent between November 2018 and August 2019.