Financial services giant Citigroup Inc. (C: Quote) on Monday reported a 12 percent drop in profit for the second quarter, amid lower revenues that missed Wall Street consensus.
Vikram Pandit, Citi's CEO, said, "Our core businesses performed well in a difficult environment and are generating solid returns. We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services.''
Citi's bigger rival JP Morgan Chase & Co. (JPM: Quote) on Friday reported a lower second-quarter profit, hit by a hefty trading loss at its Chief Investment Office. Revenues declined, but surpassed Wall Street estimates.
Citigroup's net income for the quarter declined to $2.95 billion or $0.95 per share from $3.34 billion in the prior year.
The results included credit/debit valuation adjustment or CVA/DVA of a positive $219 million as well as a net loss of $424 million from the sale of a 10.1 percent stake in Akbank T.A.S.
Excluding CVA/DVA and the loss on Akbank, profit slid 1 percent to $3.08 billion or $1.00 per share. On average, 15 analysts polled by Thomson Reuters expected earnings of $0.89 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues declined 10 percent to $18.64 billion from last year's $20.62 billion. Quarter-over-quarter, revenues dropped 4 percent. Excluding CVA/DVA & Minority Interest, revenue dropped 7 percent. Analysts expected revenues of $18.76 billion.
Revenues plunged 62 percent at Citi Holdings to $924 million, driven by lower revenues in the Special Asset Pool and in Local Consumer Lending. This was partially offset by an increase in Brokerage and Asset Management revenues. Pandit said the firm reduced Citi Holdings to around 10 percent of its balance sheet.
Citicorp revenues of $18 billion in the second quarter were almost flat with last year, but its net income advanced 6 percent from the prior year period to $4.3 billion helped by declines in operating expenses and total credit costs.
Within the segment, Global Consumer Banking revenues were flat with last year while Transaction Services revenues grew 5 percent to $2.8 billion.
Securities and Banking revenues slid 1 percent with a 21 percent decline in investment banking and a 29 percent drop in Equity Markets. Revenue from Fixed Income Markets fell 4 percent to $2.82 billion.
Total allowance for loan losses declined to $27.6 billion from $34.4 billion in the prior year period.
Citigroup shares, which closed on Friday at $26.65 compared to the previous close of $25.28 on 44.87 million shares, is advancing 2.2 percent in the pre-market.
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by RTT Staff Writer
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