Citigroup Shares Surge As Q2 Profit Beats Estimates

Citigroup Inc. (C) said its second-quarter net income decreased 27% from the prior-year period, as higher cost of credit and an 8% increase in expenses more than offset the 11% increase in revenues. However, earnings per share which decreased 23% from the prior-year period, topped Wall Street estimates.

Second quarter revenues were up 11%, with growth in both net interest income as well as non-interest revenue. Higher net interest income was primarily driven by the benefits of higher rates as well as strong volumes across Institutional Clients Group and Personal Banking and Wealth Management. The company said the increase in operating expenses was driven by continued investments in its transformation, higher business-led investments and volume-related expenses. Citigroup ended the quarter with a Common Equity Tier 1 ratio of 11.9%.

Second quarter net income was $4.5 billion, or $2.19 per share, compared to $6.2 billion, or $2.85 per share, last year. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $1.68, for the quarter. Analysts’ estimates typically exclude special items.

Revenues increased to $19.6 billion from $17.8 billion, prior year. Analysts on average had estimated $18.22 billion in revenue. Citigroup cost of credit was $1.3 billion in the second quarter 2022.

End-of-period loans were $657 billion as of quarter end, down 3% from the prior-year period. Citigroup’s end-of-period deposits were $1.3 trillion as of quarter end, up 1% from the prior-year period.

During the quarter, Citigroup returned a total of $1.3 billion to shareholders in the form of dividends and repurchases.

“We intend to generate significant capital for our investors, given our earnings power and the upcoming divestitures,” Citi CEO Jane Fraser said.

Shares of Citigroup were up 4% in pre-market trade on Friday.

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