Citigroup Inc (NYSE:C) reported quarterly financials at the top end of Wall Street expectations, sparking an initial flurry before the stock dropped back in early deals.
Second quarter revenue came in at $20.14 billion versus an analyst consensus forecast of $20.07 billion. Net income amounted to $3.22 billion, up 10% on last year, whilst earnings per share was reported at $1.52 which was comfortably higher than the $1.39 pencilled in by Wall Street analysts.
Citi’s investment banking revenue soared some 60% higher, to $853 million, with the firm citing a rebound in IPO and merger activity, albeit following last years particularly low levels.
The banks equities trading division, meanwhile, brought in 37% more revenue than last year with the unit bringing in $1.5 billion. Citi said this division was helped by higher balances among hedge funds.
Personal banking business was supported by improved net interest income but the bank’s cost of credit was up significantly, to $2.3 billion from $1.5 billion, and credit losses increased nearly 60% to $1.93 billion.
Revenue from fixed interest business was, meanwhile, down 3% but remained the biggest contributing segment at $3.6 billion.
Chief executive Jane Fraser highlighted that Citi had benefitted from its diverse business model.
Fraser noted that Citi had passed recent stress tests which had showcased the strength of the bank’s balance sheet.
“We will continue to execute our transformation and our strategy so we can meet our medium term targets and continue to further improve our returns over time,” she added.
Having opened higher, at $66.57, approaching a new high for the year, the Citi share price pulled back in early trade – at $64.53 after ten minutes, the price was down $1.24 or 1.9%.