Citigroup Inc. (NYSE: C) Friday posted second-quarter earnings that topped analysts’ estimates as fixed-income business rebounded, despite a 14 percent decline in the bank’s profit.
The company said that profit fell 14 percent to $4 billion from $4.65 billion a year earlier. On a per-share basis, earnings were $1.24 a share. The results topped analysts’ estimates. Analysts polled by Thomson Reuters had projected earnings of $1.10 per share.
Revenue for the quarter also fell 8 percent to $17.5 billion, slightly beat analysts’ estimates of $17.47 billion. This is the second consecutive quarter decline in a year-over-year basis. In the past six quarters, the bank only had one revenue gain.
"Nearly all of our net income came from our core businesses and we continued to reduce non-core assets in Citi Holdings. We significantly improved our efficiency ratio, return on assets and return on tangible common equity from the first quarter," CEO Michael Corbat said in a statement.
The better-than-expected earnings were driven by trading revenue. The New York bank said trading revenue rose 15 percent to $4.26 billion from $3.7 billion a year ago. Revenue from fixed-income rose 14 percent to $3.47 billion, topping analysts’ estimates of $3.14 billion, while revenue from equity-trading jumped 21 percent to $788 million, also beating the $707 million estimate.
Jobs cut continues to help reduce expenses. The bank said expenses fell 5 percent to $10.4 billion from $10.93 billion a year earlier. Credit costs fell 15 percent to $1.41 billion. The company cut 8% of its jobs and 4% of its branches.
"On the expense front, expenses were a little higher than we expected, but legal repositioning accounted for that, so core expenses were actually a little better than expected," he said. "On the credit side, they released some reserves. We thought they'd continue building, so it suggests that what they're seeing in credit continues to get better."