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Citigroup Profit Beats On Higher Bond Trading, Lower Costs

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Citigroup Profit Beats On Higher Bond Trading, Lower Costs

Citigroup Inc reported a better-than-expected quarterly profit on Friday, helped by lower expenses, higher bond trading revenue and strength in its consumer banking business in Mexico.

Investors have been waiting to see how trading revenue fared at the five big Wall Street banks due to an escalating U.S-China trade war and executives warning that the business’s growth would be muted.

Citigroup reported a 9 percent jump in bond trading revenue, outperforming bigger rival JPMorgan Chase & Co, which reported a 10 percent drop in fixed-income trading revenue.

Chief Financial Officer John Gerspach, who plans to retire next year, had previously said Citigroup expected total fixed income and trading revenue to be “flat to slightly higher” in the third quarter.

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The bank’s shares rose 2.4 percent to $70.20 in early trading.

Citigroup reported a 2 percent rise in global consumer banking revenue. The bank recently restructured its U.S. consumer business to operate more like those in Asia and Mexico, where it has been seeing better results.

Consumer banking revenue in Latin America rose 20 percent, including a gain on the sale of an asset management business in Mexico. Excluding that gain, revenue rose 8 percent on a constant currency basis, boosting global consumer banking revenue 3 percent.

North America branded card business reported a 3 percent drop in revenue, largely due to the sale of the Hilton hotels portfolio.

Excluding the sale, total net interest revenue from the business was $1.88 billion, up 5 percent from the second quarter and 3 percent from a year earlier.

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The card business has been a cause for concern among investors and the Wall Street bank has been looking to improve its performance.

Net income for the third-largest U.S. bank by assets rose to $4.62 billion in the third quarter ended Sept. 30, from $4.13 billion a year earlier.

Earnings per share rose to $1.73 from $1.42, helped by buybacks that reduced shares outstanding by 8 percent from a year earlier.

Analysts on average had expected earnings per share of $1.69, according to I/B/E/S data from Refinitiv.

Total revenue was slightly lower at $18.39 billion, from $18.42 billion a year earlier.

Operating expenses fell 1 percent to $10.31 billion and the company’s widely watched efficiency ratio improved to 56.1 percent from 56.6 percent a year earlier.

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Citigroup’s provision for income taxes fell by $395 million following changes in the U.S. tax code, which reduced the bank’s tax rate to 24 percent in the quarter from 31 percent a year earlier.

The bank’s return on tangible common equity was 11.3 percent in the quarter, inching closer to Chief Executive Officer Mike Corbat’s goal of 13.5 percent in 2020.

Up to Thursday’s close, Citi shares have lost 8 percent of their value for the year, compared with a 5 percent drop in the broader KBW Bank Index.

World News

Brexit Will Not Happen Next Week

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Brexit Will Not Happen Next Week

Brexit will not happen next week.  The United Kingdom has been granted a bit more time to figure out the terms of its departure from the European trading bloc.  The date could be April the twelfth or may the twenty-second.

European Council President, Donald Tusk, says he would push the departure date to May the twenty-second if the UK parliament approves a withdrawal agreement next week.

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Parliament’s failure to approve the Brexit deal next week would mean deadline for departure from the European Union will be April the twelfth.

The decision to grant the delay came a day after may delivered a televised speech blaming parliament for the Brexit impasse. That speech angered the political spectrum.

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May hopes with this European Council next decision, the House of Commons would pass a Brexit deal next week.  She says that would help bring an end to the uncertainty and would help the UK to leave Europe in a smooth and orderly manner.

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Chemical Factory Explosion In China Kills 47, Injures Over 600

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Chemical Factory Explosion In China Kills 47, Injures Over 600

An explosion at a chemical plant that occurred on Thursday in China’s eastern Jiangsu province has killed 47 people and injured over 600, among which 90 are critically injured, state media reported.

The fire which happened at a plant that contained highly inflammable chemical owned by the Tianjiayi Chemical Company spread to neighbouring factories was finally brought under control at 3.00 a.m. on Friday.

President Xi Jinping, who is in Italy on a state visit, ordered all-out efforts to care for the injured and to “earnestly maintain social stability”, state television said.

Authorities must step up action to prevent such incidents and determine the cause of the blast as quickly as possible, Xi added.

Reuters disclosed that some police at the scene were wearing face masks, sealed off roads to the plant. The blast smashed windows in the village of Wangshang two kilometres (1.2 miles) away, and shocked villagers likened it to an earthquake.

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New Zealand Bans Sale Of Assault Rifles, Semi-Automatic Weapons

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New Zealand Bans Sale Of Assault Rifles, Semi-Automatic Weapons

New Zealand has banned the sale of assault rifles and semi-automatic weapons after the country’s worst-ever attack in which fifty persons were killed in two mosques.

Prime Minister Jacinda Ardern told a news conference the ban is in the national interest and it’s about safety… To prevent an act of terror from ever happening again in New Zealand.

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Ardern said she expects the new law to be in place by mid-April.  Buy-back schemes will be established for banned weapons.

Ardern said the suspect arrested in the attacks had purchased his weapons legally and enhanced their capacity by using 30-round magazines “done easily through a simple online purchase.”

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The changes in New Zealand’s gun laws are expected to curtail future acts of random violence like the mass mosques shootings in Christchurch.

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