StockMarketNews.Today – The New York-based bank’s fees from debt trading slipped 6 per cent from a year ago, to $3.1bn, while revenues from advising companies on mergers and capital raising were 7 per cent lower at $1.4bn. The custody-banking business made up much of the shortfall, seeing an 11 per cent rise in revenues to $2.3bn. Net income in the institutional clients group was 17 per cent higher at $3.2bn.
The global consumer-banking side of Citi’s business was solid across the board, seeing modest rises in revenues across all regions and a 14 per cent rise in net income to $1.3bn.
Much of the overall rise in net income came from the big tax-reform package at the end of last year, which cut Citi’s effective tax rate from 32 per cent during the second quarter last year to 24 per cent this time.
Overall, revenues were 2 per cent higher than a year ago, at $18.5bn. Earnings per share came to $1.63, up 27 per cent on a year earlier, and better than consensus forecasts of $1.56. Net profit for the period was $4.5bn, from $3.9bn last year.
“These results demonstrate good momentum across our franchise, and that we are firmly on track to achieve the financial targets we introduced last year at Investor Day,” said Mike Corbat, the bank’s chief executive, now in his sixth year at the top.
Citi was one of a trio of big banks kicking off the second-quarter earnings season on Friday, along with JPMorgan Chase and Wells Fargo. Shares in all three have been weak over the past couple of months, weighed down by falling long-term interest rates and fears over the effects of president Trump’s bellicose talk on global trade.
Still, the KBW banks index has risen about 44 per cent since Mr Trump was elected president in November 2016, better than the one-third rise in the broader market, thanks largely to prospects of improved profits from lower taxes, higher interest rates and lighter regulation.
Earlier, JPMorgan reported quarterly revenue of $27.7bn and EPS of $2.29, up 6 per cent and 26 per cent from a year ago, respectively.
On the analyst call later on Friday morning, executives at Citi may be grilled on signs of deterioration in credit quality, which had been on a steadily improving trend for most of the post-crisis period. During the quarter Citi’s net credit losses were flat from a year earlier, at $1.7bn, but the bank added $87m to its reserves for loan losses.
Total credit costs for the first half of the year came to $3.7bn, 9 per cent higher than a year ago.
Citigroup Inc Company Profile:
Citigroup Inc. (Citi) is a financial services holding company.
The Company’s whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management.
The Company operates through two segments: Citicorp and Citi Holdings. Citicorp is the Company’s global bank for consumers and businesses and represents its core franchises. Citicorp is focused on providing products and services to customers and leveraging the Company’s global network, including various economies.
As of December 31, 2016, Citicorp was present in 97 countries and jurisdictions, and offered services in over 160 countries and jurisdictions. Global Consumer Banking (GCB) provides traditional banking services to retail customers through retail banking, including Citi-branded cards and Citi retail services.
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