UPDATE 1 — Citi profit jumps 40% with higher investment banking, services and wealth revenue

6% this year (Adds shares in paragraph 4 and executive comment) By Tatiana Bautzer and Prakhar Srivastava Oct 13 (Reuters) — Citigroup's third-quarter profit rose 40% compared to a year earlier, helped by stronger investment banking revenue and transactions with multinational companies as well as higher wealth management earnings. Trading profits gained only 2% over a year ago and fell 27% against the previous quarter, mainly due to a drop in equity trading revenue.

Wall Street banks are navigating a volatile market backdrop as the conflict in Iran pushed oil prices higher, fueling inflation concerns and prompting the US Federal Reserve to raise interest rates and bond markets worldwide to sell off dramatically. 4% in premarket trading after the results. 35 billion but fell 13% over the previous quarter as equity and debt underwriting activity slowed. 85 per share, in the three months ended September 30, the third-largest US lender reported on Tuesday.

86 per share, a year earlier. But the bank's net income was 10% lower in the third quarter compared to the second. 6%, ahead of its 11% target. "We expect to exceed this year's return target, even as we pull forward investments toward our 11-13% near-term goal — the next waypoints on our path to sustainable returns of 14-15%," CEO Jane Fraser said in a statement.

Rival JPMorgan Chase's third-quarter profit increased on Tuesday, while Wells Fargo's profit rose, helped by growth in its loan book and higher interest income. Citi's shares have risen 13% this year, outperforming the broader bank stock index. 3 billion this year. Bank stocks have come under pressure in recent weeks as a sharp rise in bond yields raised concerns that higher borrowing and funding costs could weigh on loan growth and dealmaking.

Investment Banking, Trading Revenue Slows From Q2 Global investment banking revenue exceeded $90 billion in the first nine months of the year and Citi was placed fifth among global banks by fees during the period, according to Dealogic. 74 billion. But equity and debt issuance slowed late in the quarter. US government bond yields rose to multi-decade highs in September, affecting capital markets.

Companies such as Oura Ring, Holtec Nuclear and SB Energy postponed planned IPOs. Citigroup's equity underwriting revenue fell 19% from the second quarter, though still 77% higher compared to a year earlier. 11 billion. Revenue with equities trading rose 14%, while fixed-income trading revenue was up 4%.

But the bank had 13% lower trading revenue compared with the second quarter. Services had the highest growth in the third quarter among Citi's five businesses, with 15% growth in revenue and 27% profit growth. Wealth management also grew revenue by 15% and increased client assets by the same percentage. Lower Profits With Credit Cards Citi's profit with credit cards fell 8% in the third quarter from a year earlier.

Clients spent 13% more and took 9% higher loan volumes as the US economy has continued to expand at a solid pace, supported by resilient consumer spending and business investment. But Citi's profit with cards fell due to higher reward costs and payments to partners, as well as credit provisions. 9 billion in the quarter, 4% above a year ago, as borrowers deal with moderating wage growth, inflation and higher interest rates. The New York-based bank is nearing the end of a multi-year restructuring in which it sold international businesses, simplified the organization and worked on fixing compliance, controls and data deficiencies.

Citi is seeking to rapidly resolve its efforts to address regulatory demands that have long dogged the bank, in order to fully refocus on growth. The last divestment to be completed is from its Mexican unit Banamex. Citi now owns 51% of Banamex and expects to take it out of its balance sheet and list it on the stock exchange next year. com;)