Citigroup Inc. reported net income for the third quarter of 2006 of US$5.5 billion, while international revenues grew, its capital markets businesses slumped.

Total revenues were approximately flat from the third quarter 2005, as international revenue growth was offset by a decline in U.S. revenues, reflecting lower revenues in capital markets driven businesses.

International revenues increased 11%, with international consumer revenues up 9%, international corporate and investment banking up 12%, and international wealth management up 33%.

U.S. consumer revenues and net income increased 1% and 23%, respectively. Average managed loans were up 12% and deposits increased 11%. Retail banking investment product sales increased 16%, and card purchase sales grew 9%.

Corporate and investment banking revenues and net income declined 6% and 4%, respectively. Capital markets and banking revenues and net income declined 12% and 6%, respectively, driven by lower revenues in fixed income markets and equity underwriting, which was partially offset by growth in debt underwriting and advisory, the firm said.

Global wealth management revenues increased 14%, and net income was up 30%. Fee-based and net interest revenues increased 26%, and client assets under fee-based management grew 22%.

Alternative investments revenues and net income declined significantly, the firm said, driven by lower results from private equity portfolios and liquid investments.

The net interest margin declined 11 basis points versus the second quarter 2006, primarily due to trading activities in capital markets and banking.

“Our third quarter results were driven by strength in several businesses, including international revenues, up 11%. In our U.S. consumer franchise, we are pleased with the trends we are seeing, and throughout our businesses we had good expense discipline. That said, results from our capital markets related businesses fell short of my expectations, and I expect improved results from these businesses,” said Charles Prince, chairman and CEO of Citigroup.

“As we move into the fourth quarter, our priorities remain clear: executing on our strategic initiatives to drive organic growth, targeted acquisitions, expense discipline, and generating revenue and earnings growth and superior returns for our owners,” said Prince.