CITIGROUP, Inc. beat analysts’ estimates for fourth-quarter profits on Tuesday, boosted by growth in its credit card business and a jump in trading revenue.

North American branded cards, which account for a majority of the bank’s consumer banking revenue, clocked double-digit revenue growth for the second straight quarter, rising 10% from a year earlier.

The third-largest US bank by assets has been leveraging its robust card business to help grow deposits by pitching checking and savings accounts to card holders. The bank gathered $6 billion in digital deposits last year.

Markets and securities revenue rose 28% as markets steadied during the last three months of 2019, with the gains driven by a 49% surge in fixed-income trading. Equities trading fell 23% due to weak performance in derivatives.

Citi also reached a key profitability target. The bank hit a return on tangible common equity (ROTCE) of 12.1% for 2019, above the goal of 12% it promised investors for the year.

ROTCE is a widely watched measure of how well a bank uses shareholder money to generate profits.

The bank, however, reduced its guidance for 2020 ROTCE to a range of 12% to 13%, down from prior guidance of 13.5%.

“The revenue environment has changed since we set our targets for 2020, with lower interest rates, slower global growth and the pressure we’ve seen in industry wallets in markets and banking,” Chief Financial Officer Mark Mason said on the bank’s earnings call.

The US Federal Reserve cut interest rates three times last year, crimping banks’ lending margins and their ability to raise revenue.

Citi added loans and deposits in the most recent quarter from both consumer and corporate clients as business sentiment began to improve.

Total end-of-period loans grew 2%, while deposits jumped 6%, excluding foreign-exchange fluctuations.

Credit costs jumped 15%.

Net interest income, or the difference between what a bank pays for deposits and earns from loans, was up 1% at Citi, compared with declines at JPMorgan and Wells Fargo & Co.

Net income applicable to common shareholders rose to $4.98 billion, or $2.15 per share, in the three months ended Dec. 31, from $4.31 billion, or $1.64 per share, a year earlier. Excluding the impact of a tax benefit, Citi earned $1.90 per share.

Revenue, net of interest expense, rose about 7% to $18.38 billion.

Analysts had expected a profit of $1.84 per share and revenue of $17.86 billion, according to IBES data from Refinitiv. — Reuters

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