second-quarter results topped Wall Street expectations, giving investors reason to hope for a turnaround under Chief Executive
Citigroup (ticker: C) posted earnings of $6.2 billion, or $2.85 per share, on revenue of $17.5 billion. Analysts surveyed by FactSet were expecting earnings of $1.97 per share on revenue of $17.2 billion. In the year-ago quarter, the bank earned $1.06 billion, or 38 cents a share, on $19.8 billion in revenue as it set aside nearly $6 billion in reserves in anticipation of a wave of defaults due to the coronavirus pandemic. Instead, this quarter, the bank released $2.4 billion in reserves as economic conditions improved.
Citigroup shares advanced 1.6% in premarket trading.
Fraser noted the quicker-than-expected pace of the global economic recovery, coupled with increasing consumer and corporate confidence when discussing the bank’s results.
“While we have to be mindful of the unevenness in the recovery globally, we are optimistic about the momentum ahead,” Fraser said.
Like other banks that reported results earlier this week, Citigroup saw its revenue decrease due to a drop off in trading activity. Total revenue in the bank’s trading division fell 30% year over year, with a 43% drop in fixed income trading and a 37% increase in equities trading.
Citigroup’s consumer banking unit saw a 10% drop in revenue, reflecting lower card balances and lower deposit spreads. That unit also saw a 7% increase in expenses.
In addition to Citigroup’s results, investors are paying close attention to the bank’s efforts to improve its operations after being slapped with a consent order last year for weak internal controls.
Citigroup is one of the last big banks to post results this week following reports from
(GS) on Tuesday.
Bank of America
(WFC) also reported results on Wednesday.
Morgan Stanley (MS)
reports results on Thursday.
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