Citi reduces costs, invests in tech
$1.7T bank teams with Mastercard on cross-border payments
Citi posted cost reductions in the third quarter as it benefits from ongoing simplification efforts.
The $1.7 trillion bank’s total operating expenses clocked in at $13.3 billion, down 2% year over year, according to the bank’s Q3 2024 earnings supplement. The bank’s technology spend, however, increased 1% YoY to $2.3 billion.
The savings were driven by “organizational simplification and stranded cost reductions, partially offset by volume-related expenses and continued investments in the transformation and other risk and control initiatives,” Chief Financial Officer Mark Mason said during today’s Q3 earnings call.
The bank invested in the following tech efforts:
- Cloud migration: Streamlining of the cloud onboarding process, reducing application onboarding time from seven weeks to two weeks, Mason said.
- Data quality: Improving data governance and data quality in relation to reporting following its July penalty from the Federal Reserve Board. “We are committed to spending whatever is necessary to address these areas,” Mason said.
- Tech infrastructure: Retiring 450 applications since the start of 2024, adding to a total of 1,250 applications retired since 2022 to simplify the bank’s technology infrastructure, Mason said. Additionally, the bank has updated all of its 2,300 ATMs to next-generative software to boost security.
BY THE NUMBERS: Citi reported for Q3:
- Total revenue of $20.3 billion, a 1% YoY increase;
- Net income of $3.5 billion, a 9% YoY decrease;
- An efficiency ratio of 65.2%, down from 67.1% during the corresponding period last year; and
- Headcount down 5% YoY to 229,000.
TRANSACTIONS: On Oct. 10, the bank announced it is working with Mastercard to offer cross-border payments.
“This will ultimately enable near-instant payments to the vast Mastercard debit network, starting with 14 markets with more to come early next year,” Chief Executive Jane Fraser said during the call
To enable the payments, the bank is using Citi’s WorldLink Payment Services and Mastercard Move’s money transfer solution, according to an Oct. 10 release.
Citi also announced during the quarter a $25 billion private credit, direct lending program with asset management firm Apollo.
MARKET REACTION: Shares of Citigroup (C) were down 5.11% from market open to $62.64 at market close. Citi has a market capitalization of $120.3 billion.
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