Citigroup Inc C

Narrow-moat Citigroup reported decent third-quarter earnings, easily beating FactSet consensus EPS of $1.71 with reported EPS of $2.15. This equates to a return on tangible common equity of 11% for the quarter. The bank benefited from a provisioning benefit once again, as credit costs remain non-existent. Charge-offs have been exceptionally low for the industry this quarter, and Citi’s card balances have also fallen substantially, further helping to lower the bank’s credit costs. Expenses continued to build, up 3% over last quarter as the bank continues to invest in its backend and regulatory initiatives. Revenue would have been up roughly 2% if not for the estimated $680 million loss on the bank’s sale of its consumer operations in Australia. It’s good that the bank is pruning some of its less successful operations, but this serves as a reminder of some of the bad investments the bank has made over the years.