Citi posts highest profit in eight years as costs plunge

Citigroup reported its highest quarterly profit in eight years as restructuring and cost cuts paid off and legal expenses plunged.

Second-quarter net income jumped to $4.85 billion (€4.47 billion), or $1.51 a share, from $181 million, or 3 cents, a year earlier, when the firm had $3.7 billion in costs from settling a mortgage-bond probe,

Citi has been simplifying its structure by selling retail operations in several countries, shrinking its US branch network and disposing of non-core businesses.

The bank’s shares rose 2.5 per cent to $57.94 in premarket trading on Thursday.

Operating expenses in Citicorp, the bank’s core businesses, fell 6 per cent to $9.8 billion in the second quarter and were down 1 percent when adjusted for currency changes.

The expenses included $61 million in restructuring charges, down from $397 million a year earlier.

Revenue from Citicorp was unchanged at $17.5 billion, but rose 5 percent after adjusting for changes in foreign exchange rates.

Goldman Sachs Group Inc, which reported results earlier on Thursday, said quarterly profit more than halved, hurt by weaker trading revenue and litigation expenses.

Adjusting for legal costs and some accounting items, Citi’s net income rose 18 percent to $4.65 billion, or $1.45 per share, from $3.93 billion, or $1.24 per share, a year earlier.

Analysts on average had expected earnings of $1.34 per share, according to Thomson Reuters.

Reuters