NEW YORK CITY, New York: US banking giant Citigroup Monday reported better-than-expected quarterly earnings as strong securities and investment banking revenues helped offset weaker mortgage business and continued US consumer caution.
Net income came in at $4.2 billion on revenues of $20.5 billion in the second quarter, an increase of 26.2 percent from $2.9 billion on revenues of $18.4 billion in the year-ago period.
Excluding the effects of a prior-year asset sale and some debt cost effects, Citi reported earnings of $1.25 per share, solidly topping analyst expectations of $1.18.
Citi shares were up 1.2 percent at $51.42 in midday trade in New York. JPMorgan Chase and Wells Fargo also bested analyst expectations last week. The remaining large banks report later this week.
Citi chief executive Michael Corbat pointed to year-on-year revenue and profit growth across the globe.
“Our businesses performed well during the quarter and these results are well-balanced through our products and geographies, especially in the emerging markets, where growth is being challenged,” Corbat said in a statement.
Citi said its securities and banking division had particularly strong growth, with revenues jumping 25 percent from a year ago to $6.8 billion.
Credit quality continued to improve. The estimate for North American mortgage delinquencies fell to $1.2 billion from $1.6 billion in the year-ago period.
Like peer banks, JPMorgan Chase and Wells Fargo, Citi warned that the recent jump in interest rates would drag on North American mortgage originations.
Citi’s retail banking revenues declined 4 percent to $1.6 billion, in part due to lower mortgage origination and servicing revenues.
Legal expenses jumped 73.3 percent to $832 million as the bank continued to address legacy issues resulting from the financial crisis.
Citi chief financial officer John Gerspach said US consumers were still in a period of “deleveraging” that might not truly improve for at least a few more quarters. The key is whether economic growth picks up.
“If the economy continues to drag along in something like the 1.5-2 percent (growth) range, I think that’s going to present a challenge,” Gerspach told reporters on a conference call.
“I think we’d all like to see an economy that moves forward in the 3.5 to 4 percent range, but that doesn’t seem to be in the offing, at least in the next couple of quarters.”
Loan growth quarter-on-quarter was mixed. In North America, Citi’s biggest division, credit card loans inched 1 percent higher compared with the first quarter, while retail banking loans slipped 3 percent.
Worldwide, both credit card and retail banking loans fell 2 percent.
In terms of corporate loans, securities and loans were down 2 percent compared with the first quarter, while transaction services jumped 18 percent.
Dear TNT Reader,
At The News Tribe, our mission is to bring you free, independent, and unbiased news and content that keeps you informed and empowered. We are committed to upholding the highest standards of journalism, as we understand that we are a platform for truth.
Apart from independent global news coverage, we also commit our unique focus on the Muslim world. In an age marked by the troubling rise of Islamophobia and widespread misrepresentation of Muslims in Western media, we strive to provide accurate and fair coverage.
But to continue doing so, we need your support. Even a small donation of 1$ can make a big difference. Your contribution will help us maintain the quality of our news and counteract the negative narratives that are so prevalent.
Please consider donating today to ensure we can keep delivering the news that matters. Together, we can make a positive impact on the world, and work towards a more inclusive, informed global society.
Donate Monthly Subscription Annual Subscription