Citigroup on Wednesday, the results for the second quarter were released, which were impacted by a rise of $ 1.1 billion due to the release of reserves that the bank has set aside to cover loan losses.
Here’s how the bank did it:
Earnings: $ 2.85 per share, which exceeds the estimate of analysts surveyed by Refinitiv at $ 1.96.
Income: $ 17.47 billion, less than the $ 17.2 billion estimate.
While the bank managed to beat revenue expectations, the figure was down 12% year-on-year, driven by weaker fixed income trading performance, a decline in credit card loans and falling interest rates.
The firm’s profits jumped after it freed up reserves set aside to cover loan losses, resulting in a payoff of $ 1.1 billion after a $ 1.3 billion write-down. A year ago, the bank was forced to set aside billions to cover expected credit losses, resulting in a loan cost of $ 8.2 billion.
The bank’s shares rose 1.6% after the income statement.
“The global economic recovery is faster than previous expectations, and with it consumer and corporate confidence is growing,” the CEO said. Jane Fraser the release says. “We’ve seen this across all of our businesses, reflected in our investment banking and equity performance, as well as a marked increase in our credit card spending. While we must be mindful of the unevenness of recovery around the world, we are optimistic about the future. … “
Like other Wall Street competitors, Citigroup reported a sharp decline in fixed income revenue in the quarter, offset in part by stronger equity trading results.
Fixed income revenue was $ 3.2 billion, below the $ 3.66 billion estimate, and the $ 1.1 billion stock trading revenue exceeded the $ 879 million estimate.
Fraser, who became CEO in February, announced in April, Citigroup closed retail operations in 13 countries outside the United States to boost profitability. Analysts are now wondering what else Fraser has planned for her strategic overhaul of Citigroup, the third-largest US bank.
Citigroup shares are up 11% this year to Wednesday, compared with a 26% rise in the KBW Bank Index.
Earlier Wednesday, Bank of America reported earnings that missed analysts’ expectations caused by falling interest rates. Tuesday, Jp morgan chase as well as Goldman sachs each published results that exceeded expectations, fueled by high income from Wall Street advisory activities.
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