Citigroup Inc (NYSE:C) Q3 2020 Earnings Conference Call - Final Transcript

Oct 13, 2020 • 10:00 am ET


Citigroup Inc (NYSE:C) Q3 2020 Earnings Conference Call - Final Transcript


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Hello, and welcome to Citi's Third Quarter 2020 Earnings Review with the Chief Executive Officer, Mike Corbat, and Chief Financial Officer, Mark Mason. Today's call will be hosted by Elizabeth Lynn, Head of Citi Investor Relations.

[Operator Instructions] Also as a reminder, this conference is being recorded today. If you have any objections please disconnect at the time.

Ms. Lynn, you may begin.

Elizabeth Lynn

Thank you, operator. Good morning and thank you all for joining us. On our call today our CEO, Mike Corbat will speak first. Then Mark Mason, our CFO will take you through the earnings presentation, which is available for download on our website, Afterwards, we will be happy to take questions.

Before we get started, I'd like to remind you that today's presentation may contain forward-looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances.

Actual results, capital and other financial conditions may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our discussion today and those included in our SEC filings, including without limitation, the Risk Factors section of our 2019 Form 10-K.

With that said, let me turn it over to Mike.

Michael Corbat

Thank you, Liz, and good morning everyone. Today, we reported earnings for the third quarter of 2020. We had net income of $3.2 billion and earnings per share of $1.40. We continue to navigate the COVID-19 pandemic extremely well. Credit costs have stabilized, deposits continued to increase and revenues are up 3% year-to-date.

As you know, last week, we entered into consent orders with the Federal Reserve and the OCC, and I will discuss how we're approaching those after I go through our business and financial performance. Our Institutional Clients Group continues to perform extremely well. Investment banking had another strong quarter, accessing the capital markets for our clients and private bank revenues are now up 9% year-to-date.

Treasury and Trade Solutions, the backbone of our global network is down only 4% for the quarter and 5% for the year in constant dollars, despite significantly lower interest rates. Trading performance was strong as well, with fixed income and equities up 42% and 18% respectively year-to-date. Global Consumer Banking revenues remain under pressure due to the economic impact of the pandemic, predominantly driven by the decline in credit card spending. At the same time, deposits continue to increase significantly, credit costs decreased and we saw more investment activity from our wealth management clients.

On balance, our global consumer banking franchise has shown resilience in light of the challenges we're facing. Our capital position strengthened during the quarter with our common equity Tier 1 ratio increasing to a 11.8%, well above our regulatory minimum of 10%. Our tangible book value per share increased to $71.95, up 4% from a year ago and we remain committed to returning capital to our shareholders over time.

Turning to the consent orders, we focused on four areas that impacted our risk and control