Citigroup beats profit estimates as rate hikes bolster lending business

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Citigroup Inc beat estimates for third-quarter profit on Friday as its lending business benefited from a series of interest rate hikes by the Federal Reserve and offset weakness in other divisions such as investment banking and trading.

The logo for Citibank is seen on the trading floor at the New York Stock Exchange in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kellybeat estimates for third-quarter profit on Friday as its lending business benefited from a series of interest rate hikes by the Federal Reserve and offset weakness in other divisions such as investment banking and trading.

"We're prepared for whatever the environment looks like and we're running scenarios constantly to ensure that we're ready to deal with that." Revenue from markets division, which houses fixed income and equity trading units, also fell 24% for the quarter. Citi, although not a big player in the leveraged finance market, took a writedown of $110 million in the third quarter, as rising interest rates made it tougher for it to offload high-risk debt onto investors and other lenders.The worsening economic picture also led the bank to add $370 million to its loan-loss reserves in the latest quarter, compared with a release of $1.16 billion a year earlier.

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