Citigroup's quarterly profit gets boost from trading

Citi's net income rose to $3.57 billion, or $1.14 per share, in the quarter ended Dec. 31, from $3.34 billion, or $1.02 per share, a year earlier, topping the average analyst estimate of $1.12 per share, according to Thomson Reuters I/B/E/S.

Citigroup's revenue from fixed-income trading rose about 36 percent, while equity trading revenue rose about 15 percent, pushing up total markets and securities services revenue by about 24 percent compared with the same quarter last year.

"We had a strong finish to 2016, bringing momentum into this year," Chief Executive Michael Corbat said in a statement. "We drove revenue growth in our businesses and demonstrated strong expense discipline across the firm."

However, adjusted revenue fell 9 percent to $17.01 billion due to divestitures and missed the average estimate of $17.30 billion.

Wall Street trading desks benefited in the quarter from higher volume and volatility in stocks, bonds and currencies in the wake of Donald Trump's surprise victory on Nov. 8.

Goldman Sachs Group Inc (GS.N) reported a jump of about 78 percent in revenue from trading fixed-income securities, currencies and commodities earlier on Wednesday.

JPMorgan Chase & Co (JPM.N), the No. 1 U.S. bank by assets, and Morgan Stanley (MS.N) also reported sharp increases in fourth-quarter fixed-income trading revenue.

Adjusted revenue from Citicorp, Citigroup's ongoing businesses, rose 6 percent to $16.36 billion. Citicorp's expenses fell 2 percent to $9.46 billion.

Citigroup's shares were little changed in premarket trading, having risen about 17 percent since the election.

Shares of U.S. banks have staged a dramatic rally following Trump's victory as investors expect banks to reap huge benefits from lighter regulation under his presidency.

The Federal Reserve, which raised interest rates by 0.25 percentage points in December, is expected to raise them again three times this year. That will also help banks.

Citigroup said adjusted return on tangible common equity, a key measure of profitability, was unchanged at 7.1 percent.

Corbat set a target of reaching a 10 percent return on equity by 2015 shortly after taking the reins in 2012.

Total operating expenses fell 9 percent to $10.12 billion.

Citigroup, which has more assets in emerging markets than other U.S. banks, has been exiting less profitable operations in markets around the world, consolidating back offices and cutting jobs to become more efficient.

(Reporting by Sweta Singh in Bengaluru and David Henry in New York; Editing by Saumyadeb Chakrabarty)