Citigroup said on Monday that its third-quarter earnings plummeted because of a $4.7 billion loss related to the joint venture brokerage business Morgan Stanley Smith Barney.
Last month, Citigroup agreed to sell its part of the joint venture, beginning with a 14 percent stake, to Morgan Stanley. Citigroup said at the time that it was writing down the value of its remaining interest in the brokerage business.
The loss was offset slightly by an uptick in mortgage lending and buoyed by a rebound in capital markets. The nation's third-largest bank reported net income of $468 million, or 15 cents a share, on revenue of $14 billion, compared with net income of $3.8 billion, or $1.23 a share, in the quarter a year earlier.
Excluding the loss on its brokerage unit, a one-time accounting charge and credit adjustments, Citi earned $3.27 billion, or $1.06, up from $2.57 billion, or 84 cents a share, in the quarter a year earlier.
Citi was expected to record earnings per share of 96 cents on revenue of $18.7 billion.
Under the leadership of Vikram S. Pandit, its chief executive, the bank has worked to slash the bank's expenses and reduce its credit losses. “Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues,†Mr. Pandit said in a statement.
Along with Bank of America, Citigroup was among the banks most crippled by the financial crisis of 2008. Mr. Pandit has vowed to restore the bank to profitability, in part by shedding more troubled assets.
Citigroup is still trying to work through the glut of bad assets it holds in its Citi Holdings Unit.
Increasingly, a large share of the company's earnings stem from its consumer banking unit in North America, which includes mortgage lending.
While Citigroup didn't get the same mortgage boost as rivals JPMorgan and Wells Fargo, which reported robust profits on Friday from a refinancing fren zy, the bank reported an 18 percent increase in profit in its North American Banking segment, in part because of mortgage lending.
The bright spot for Citi on Monday was a 67 percent increase in profits from its securities and banking unit. The bank benefited from revived capital markets activity.
Outside of the United States, however, some of Citi's results were lackluster. Profit fell 3 percent in its international consumer banking unit to $862 million from $885 million a year earlier.
