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Citigroup profit hit by consumer bank woes; warns of more pain

Citigroup profit hit by consumer bank woes; warns of more pain

By Imani Moise and Niket Nishant

(Reuters) – Citigroup Inc beat analysts’ estimates for third-quarter profit on Tuesday, driven largely by a surge in trading, but its results underscored deeper troubles in its consumer bank that struggled with a decline in customers and spending.

The bank, which will have Wall Street’s first woman CEO, Jane Fraser, at its helm early next year after long-time Chief Executive Michael Corbat retires, faces a series of challenges as a coronavirus-induced recession grips American households.

Citi’s shares fell over 4% in early trade as management on a conference call indicated that the third-largest U.S. lender was bracing for prolonged pain, a view that contrasted with JPMorgan Chase Inc’s more upbeat views on loan losses.

“We are expecting a somewhat more muted and slower recovery in both unemployment and GDP through 2022,” said Chief Financial Officer Mark Mason.

“In the crisis we are managing through, we’re not seeing acquisitions or new account openings.”

With the recession crushing consumer and business confidence, and with it demand for loans, Citi reported its first outright fall in revenue this year, down 7% to $17.3 billion in the third quarter.

Profit tumbled by more than a third as its credit card customers closed accounts and spent less.

Revenue in North American branded cards, the growth engine for Citi’s consumer bank going into the year, fell 12%.

The bank, one of the largest credit card issuers globally, said end of period open accounts across its portfolio dropped by 4%, or more than 5 million, and purchase sales slid 10%.

BRIGHT SPOTS

There were, however, some bright spots.

Citi’s trading business turned in another strong quarter, with revenue from bond and stock market trading jumping 18% and 15%, respectively.

Credit costs were helped in part by lower loan volumes, particularly in

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North Korea celebrates party anniversary amid economic woes

North Korea celebrates party anniversary amid economic woes

SEOUL, South Korea (AP) — North Korea on Saturday celebrated the 75th anniversary of its ruling party with outside observers expecting leader Kim Jong Un to take center stage in a massive military parade in capital Pyongyang, where the North could possibly unveil the latest weapons in its growing nuclear force threatening U.S. allies and the American mainland.

It wasn’t immediately clear as of Saturday morning whether any events were proceeding.

A programming schedule announced by North Korean television didn’t include plans to broadcast a military parade and mass rally, which South Korean government officials and private analysts have said were being prepared at Pyongyang’s Kim Il Sung Square.

While North Korean TV had provided live coverage of a 2017 military parade honoring the birth of Kim’s late grandfather and state founder Kim Il Sung, the next two military parades in 2018 were recorded and broadcast later.

This year’s anniversary comes amid deadlocked nuclear negotiations with the Trump administration and deepening economic woes, which analysts say are shaping up as one of the biggest tests of Kim’s leadership since he took power in 2011.

South Korean officials and analysts have said North Korea could showcase a new intercontinental ballistic missile or other nuclear-capable weapons during a parade, which would highlight how the country has continued to expand its military capabilities amid stalled nuclear talks.

But while he may put on a huge display of his military hardware, analysts say Kim will likely avoid direct or harsh criticism toward Washington during his speech at the event and instead focus on a domestic message of unity in face of economic hardship.

Many analysts believe North Korea will avoid serious negotiations or provocations before the U.S. presidential election in November as a change in U.S. government could force the country to recalibrate its

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