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Citigroup Q2 Profit Drops, But Results Top Estimates

Citigroup (C) reported a profit for the second-quarter that dropped 73 percent from last year, hurt by the higher cost of credit, partially offset by the higher revenues and a lower effective tax rate.

But, quarterly revenues increased 5 percent from the prior-year period, primarily reflecting higher revenues in Fixed Income Markets and Investment Banking, both in the Institutional Clients Group, partially offset by lower revenues in Global Consumer Banking.

Both adjusted earnings per share and revenues topped analysts' expectations.

Net income for the second quarter 2020 dropped to $1.32 billion or $0.50 per share, from $4.80 billion or $1.95 per share in the second quarter 2019. Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share for the second-quarter. Analysts' estimates typically exclude special items.

Total revenues for the second-quarter increased 5 percent to $19.77 billion from $18.76 billion in the prior year. Analysts expected revenues of $19.11 billion for the quarter.

Global consumer banking revenues were $7.3 billion down 10% from the prior year on a reported basis and 7% in constant dollars, as lower loan volumes and lower interest rates across all regions offset strong deposit growth, reflecting the continued impact of COVID-19.

Institutional clients group revenues were $12.1 billion up 21% from last year, as strong performance in Fixed Income Markets, Investment Banking, and the Private Bank was partially offset by lower revenues in Treasury and Trade Solutions, Corporate Lending and Securities Services.

Corporate / Other revenues were $290 million down 49% from the previous year, reflecting the wind-down of legacy assets and the impact of lower rates, partially offset by AFS gains as well as positive marks on legacy securities, as spreads tightened during the quarter.

In Tuesday pre-market trade, C is currently trading at $52.88, up $0.68 or 1.30 percent.

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