Hello, I'm John Gerspach, Chief Financial Officer of Citigroup. This morning, we reported results for the third quarter of 2014, and I'd like to take a few moments to go through them with you.
Citi earned $3.7 billion in the third quarter, a 13% increase over last year. In a moment, I'll go through the results for our key businesses in more detail. But first, let me address the strategic actions we announced for our consumer bank to streamline and simplify our operations.
Citi will be exiting the consumer businesses in eleven markets across Latin America, Asia and Europe, plus the consumer finance business in Korea. We are actively looking to divest these businesses and--beginning with the first quarter of next year--we will report their results as part of Citi Holdings. While these are solid businesses, our firm lacks the scale in those markets to generate meaningful returns in the consumer sector. We will continue to serve our institutional clients in these countries, which remain an integral part of our global network.
Overall, our consumer bank performed well this quarter. Outside North America, net income grew 22% year-over-year, lifted by a 5% rise in revenues and a 13% decline in credit costs. Average loans rose 5% and deposits 3%, while we were able to keep expenses roughly flat.
In North America, consumer profits jumped 33% year-over-year, on 5% higher revenues. These improvements spread across all three component businesses, with revenues in retail banking up 9%, branded cards up 1%, and Retail Services up 8%. Ongoing cost reduction initiatives enabled us to cut core operating expenses by 3%, even as we absorbed the impact of the Best Buy portfolio acquisition.
Net income in our institutional businesses grew 29% over the same period last year, with revenues up 13%. Importantly, this strong performance was also spread across all our key segments. Treasury and Trade Solutions, Investment Banking, the Private Bank, as well as core lending, fixed income, equities and securities services all generated higher revenues year-over-year: In particular, investment banking and equities both showed very strong performance, with investment banking revenues up 32% on strong M&A and equity underwriting, and equities up 14% on improved client activity and better trading performance.
In Citi Holdings, we closed the sales of our consumer businesses in Greece and Spain, which helped reduce assets during the quarter by 7% to $103 billion. Holdings assets now constitute only 5% of Citigroup's balance sheet. Also, Holdings generated its second consecutive quarterly profit, which helped drive utilization of our deferred tax assets--to $700 million for the quarter and $2.9 billion year-to-date.
Finally, in the third quarter, we generated nearly $4 billion in regulatory capital and grew our Tier One Common ratio to 10.7%.
In summary, our results in the third quarter demonstrated momentum across the firm. In consumer banking, we grew revenues, loans and deposits in every region - resulting in positive operating leverage and income growth over last year. And in our institutional franchise, we saw broad revenue growth across Markets, Investment Banking and Treasury & Trade Solutions - also resulting in significant positive operating leverage and growth in net income. In Citi Holdings, we were profitable again this quarter, while continuing to wind down the assets in an economically rational manner. And we continued to grow our book and regulatory capital.
Looking to the fourth quarter, in Markets, our results will likely reflect the overall environment, as well as normal seasonal trends. In Investment Banking, revenues will also reflect the overall market, but we feel good about the quality and momentum of our franchise, as demonstrated by our performance to date. In Treasury and Trade Solutions, we believe we can continue growing our revenues year-over-year in the fourth quarter, driven by continued volume growth and abating spread headwinds. And in Consumer Banking, we also believe we can continue growing our revenues, maintaining positive operating leverage year-over-year.
Thank you once again for your interest in Citi, and I look forward to reviewing our fourth quarter and full year results with you next January.