Profit Climbs at Citigroup and BofA

Citigroup Inc. and Bank of America Corp. on Thursday posted double-digit increases in third-quarter profit, driven by gains in consumer lending and fees.

Profit at Citigroup, the world’s largest financial services company, rose 13% to $5.31 billion, while profit at Bank of America, the No. 3 U.S. bank, jumped 29% to $3.76 billion. Retail businesses such as branch banking and credit cards generated more than half of each company’s revenue.

The banks’ shares fell amid a broad decline in financial stocks. Citigroup fell 41 cents, or 0.9%, to $43.70, and Bank of America fell 81 cents, or 1.8%, to $44.20 on the New York Stock Exchange. The Philadelphia KBW bank index fell 1.3%.

New York-based Citigroup said net income totaled $1.02 a share, up from $4.69 billion, or 90 cents, a year earlier. Analysts polled by Reuters Estimates had on average estimated income at 99 cents.

Revenue rose 6% to $20.5 billion but was down 8% from the second quarter and fell short of analysts’ average estimate of $21.7 billion. Expenses rose 12%.

About 58% of quarterly profit came from consumer businesses, while 27% came from corporate and investment banking.

Charlotte, N.C.-based Bank of America said net income totaled 91 cents a share, as analysts expected. It earned $2.92 billion, or 96 cents a share, a year earlier.

Profit per share fell because Bank of America issued shares to buy FleetBoston Financial Corp. for $48 billion in April. The company also recently conducted a 2-for-1 stock split.

Revenue rose 29% to $12.6 billion, as lending income rose 45% to $7.7 billion and fee income rose 10% to $4.9 billion.