The bank delivered a sound beat with core earnings coming 19% above KBW's estimates and 10% higher than the Street. Analyst David Konrad was impressed that with the bank's strong performance on the topline.
While the bulk of the outperformance came from strong fixed income trading revenues, which might be unsustainable, the analysts noted that the bank posted "strong balance sheet growth, modestly higher NIM
The company was also making long-term progress, as it wound down its bad bank, Citi Holdings, and improved its Basel III Capital ratio to 8.6% from 7.9% in the last quarter.Of course, the award is not without a sense of irony. A day after Citigroup declared strong quarterly results, bank CEO Vikram Pandit surprised the industry in a sudden resignation. In the days that followed, media reports suggested that the CEO had been ousted by Chairman Michael O'Neill in a dramatic coup. Still, analysts welcomed the new management change. KBW analysts expect the new CEO Michael Corbat, to be "more focused on selling underperforming assets and distributing capital to shareholders." Even more ironic, KBW said Wells Fargo (WFC - Get Report) which is considered a high quality bank, had the "worst quarter", due to decline in net interest margins. The analysts also awarded JPMorgan Chase (JPM - Get Report) as the best investment bank for the third quarter, while Goldman Sachs (GS - Get Report) was awarded the best trader. -- Written by Shanthi Bharatwaj in New York
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