Citigroup profit beats on smaller drop in trading revenue

Lender said markets revenue declined about 7% in the second quarter from a year earlier

Citigroup reported a quarterly profit that beat analysts' estimates as trading revenue held up better than the company's forecast and loans grew.

The lender said markets revenue declined about 7 percent in the second quarter from a year earlier, smaller than the 12 per cent drop chief financial officer John Gerspach had projected at a conference two weeks before the end of the quarter.

Client trading surged a year earlier around UK’s Brexit vote.

The fourth-biggest US bank by assets said on Friday net income fell 3.2 per cent to $3.87 billion (€3.38 billion) in the second quarter ended June 30th.


Citigroup’s total revenue rose 2 per cent to $17.90 billion and beat estimates of $17.37 billion.

Fixed-income trading revenue fell 6 per cent, while equity trading revenue dropped 11 per cent.

Lending momentum

Loans at the end of the period were up about 2 per cent from a year earlier, as well from the end of March, indicating a new momentum for lending.

Operating expenses rose 1.3 per cent to $10.51 billion. But the ratio of expenses to revenue remained at 59 per cent.

Tangible book value per share increased 6 per cent to $67.32.

Citigroup's shares have climbed toward their tangible book value since mid-April largely in anticipation of the company being allowed by the US Federal Reserve to use excess capital to buy back stock.

Citigroup got the go-ahead on June to repurchase up to $15.6 billion of common stock over the next year - nearly twice as much as the year before - as well as double its quarterly dividend to 32 cents per share, bringing total payouts to $18.9 billion for the period.

Wells Fargo & Co, the third-biggest US bank by assets, also reported on Friday.

- (Reuters)