Citigroup, Inc. (NYSE: C) reported its second quarter financial results during Monday’s pre-market hours. The bank topped analysts’ estimates in both earnings and revenue. Despite the beat, Citi shares were trading 1.64% lower shortly after the opening bell.
For the second quarter, Citi reported earnings of USD 1.95 per share on revenue of USD 18.76 Billion. Refinitiv analysts expected earnings of USD 1.80 per share on revenue of USD 18.5 Billion.
Citi reported that its revenue grew by 2% year-over-year largely due to a USD 350 Million pre-tax gain on Citi’s investment in Tradeweb, an electronic trading platform. However, revenue was partially offset by declines in the firm’s Investment Banking and Fix Income and Equity Markets revenue. Additionally, mark-to-market losses on loan hedges weighed in on Citi’s revenue.
Despite the declines in some of Citi’s segment, the bank reported that earnings were 20% higher year-over-year. Excluding the impact of the Tradeweb IPO, Citi would have reported earnings of USD 1.83 per share.
The stronger quarter was also driven by the Company’s decrease in operating expenses. Citi’s efficiency ratio improved to 56% compared to 58% a year ago. Moreover, the bank also surpassed analysts’ efficiency ratio of 57.3%. For the quarter, Citi reported operating expenses of USD 10.5 Billion, decreasing by 2% year-over-year, primarily driven by efficiency savings and wind-down of legacy assets.
Citi’s Global Consumer Banking reported revenues of USD 8.50 Billion, increasing 3% year-over-year. Institutional Client Group reported revenues of USD 9.72 Billion, remaining flat year-over-year. Lastly, Corporated and Other revenues rose by 1% year-over-year to USD 532 Million.
Citi’s allowance of loan losses was USD 12.5 Billion, or 1.82% of total loans, at the end of the second quarter, increasing from USD 12.1 Billion or 1.18% of total loans compared to the same period a year ago. Total non-accrual assets fell by 9% year-over-year to USD 3.7 Billion. Consumer non-accrual loans declined by 7% to USD 2.2 Billion, while corporate non-accrual loans decreased by 13% to USD 1.4 Billion.
The bank’s end-of-period loans rose by 3% to USD 689 Million. The growth was driven by a 4% aggregate growth by Citi’s 6% growth in its ICG segment and 3% growth in its GCB. The growth in the two segments also led to a 5% increase in Citi’s end-of-period deposits, reaching USD 1.0 Trillion at the end of the quarter.
Citi reported book value per share of USD 79.40 and tangible book value per share of USD 67.64, increasing by 10% year-over-year.
Citi was the first among the major U.S. banks to report their quarterly results. On Tuesday, JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) are expected to report in the morning. Meanwhile, Bank of America (NYSE: BAC) will report on Wednesday during pre-market hours.