Quarterly profit fell at two more of the U.S.' biggest banks amid a low interest rate environment. Fred Katayama reports.
Quarterly profit fell at two more of the country's biggest banks, Citigroup and Wells Fargo. Let's start with Citigroup which kept cutting expenses, but its profit dropped 14 percent in the low interest rate environment. And revenue fell as well. The benefit of snatching the Costco credit card portfolio from American Express was offset by the higher costs for its card rewards program. Revenue from investment banking fell, too. Two bright spots: as with rival JPMorgan Chase, the spike in trading volume from Britain's vote to leave the European Union fueled fixed income trading in currencies and bonds. Even equities trading revenue rose. And despite the drop in the top and bottom lines, revenue and profit beat analysts' estimates, sending Citi's shares higher in early trading. UBS analyst Brennan Hawken said, "... these results show Citi's steady underlying improvement, despite the difficult environment." Profit also fell at Wells Fargo, but not by as much as Citi. It managed to grow revenue, extending more commercial and consumer loans. Low rates helped boost the issuance of home loans. But mortgage banking profit fell 17 percent. Wells Fargo shares losing more ground in early trading. They are down 10 percent so far in 2016.