© Reuters. The logo for Citibank is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly
(Reuters) -Citigroup Inc reported a 25% drop in third-quarter profit on Friday as its investment banking business struggled to cope with a slump in dealmaking.
M&A activity has grounded to a halt this year as corporates try to calibrate their businesses to a higher interest-rate regime across most parts of the world, while dealing with geopolitical uncertainties such as the fallout from the Ukraine war.
The weaker economic picture prompted Citi to add $370 million to reserves this quarter. That compares with a release of $1.16 billion from its reserve a year earlier.
The increase in reserves pushed up Citi’s overall credit costs to $1.36 billion, compared with a benefit of $192 million a year earlier.
Net profit was $3.5 billion, or $1.63 per share, in the three months ended Sept. 30, compared with $4.6 billion, or $2.15 per share, a year earlier.
Analysts on average had expected a profit of $1.42 per share, according to Refinitiv IBES data. It was not immediately clear if the reported numbers were comparable to estimates.
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