Citigroup profit beats on smaller drop in trading revenue

A view of the exterior of the Citibank corporate headquarters in New York, New York May 20, 2015. — Reuters picA view of the exterior of the Citibank corporate headquarters in New York, New York May 20, 2015. — Reuters picNEW YORK, July 14 — Citigroup Inc reported a quarterly profit that beat analysts’ estimates as trading revenue held up better than the company’s forecast and loans grew.

The lender said markets revenue declined about 7 per cent in the second quarter from a year earlier, smaller than the 12 per cent drop chief financial officer John Gerspach had projected at a conference two weeks before the end of the quarter.

Client trading surged a year earlier around UK’s Brexit vote.

The fourth-biggest US bank by assets said today net income fell 3.2 per cent to US$3.87 billion (RM16.1 billion) in the second quarter ended June 30.

Earnings per share was US$1.28, topping analysts’ average estimate of UA$1.21, according to Thomson Reuters.

JPMorgan Chase & Co, the biggest US bank by assets, also reported a better-than-expected rise in quarterly profit earlier today, helped by higher interest rates and growth that cushioned a decline in trading.

Citigroup’s total revenue rose 2 per cent to US$17.90 billion and beat estimates of US$17.37 billion.

Fixed-income trading revenue fell 6 per cent, while equity trading revenue dropped 11 per cent.

Loans at the end of the period were up about 2 per cent from a year earlier, as well from the end of March, indicating a new momentum for lending.

Operating expenses rose 1.3 per cent to US$10.51 billion. But the ratio of expenses to revenue remained at 59 per cent.

Tangible book value per share increased 6 per cent to US$67.32.

Citigroup’s shares were nearly flat in premarket trading. Up to yesterday’s close, the stock had gained 12.8 per cent this year.

The shares have climbed toward their tangible book value since mid-April largely in anticipation of the company being allowed by the Federal Reserve to use excess capital to buy back stock.

Citigroup got the go-ahead on June to repurchase up to US$15.6 billion of common stock over the next year — nearly twice as much as the year before — as well as double its quarterly dividend to 32 cents per share, bringing total payouts to US$18.9 billion for the period.

Wells Fargo & Co, the third-biggest US bank by assets, also reported today. — Reuters

Source: The Malay Mail Online

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