Citigroup (NYSE: C) reported better-than-expected second-quarter earnings on Friday, surpassing analyst expectations, amid rising interest rates and positive trading results. The bank’s shares rose 8% during early morning trading.
Citi CEO Jane Fraser said, “While the world has changed since our Investor Day in March, our strategy has not and we are executing it with discipline and urgency. Treasury and Trade Solutions fired on all cylinders as clients took advantage of our global network, leading to the best quarter this business has had in a decade. Trading volatility continued to create strong corporate client activity for us, driving revenue growth of 25% in Markets. While economic sentiment clearly impacted Investment Banking and Wealth Management, we continue to invest in these businesses and we like where they are headed.
The multinational investment bank and financial services corporation reported earnings of USD2.19 per share, compared to the expected USD1.68 a share. Revenue amounted to USD19.64 Billion, higher than analysts anticipated USD18.22 Billion.
“In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times, given our liquidity, credit quality, and reserve levels. I am particularly pleased with our capital strength. We ended the quarter with a Common Equity Tier 1 ratio of 11.9%, having built capital due to a higher regulatory requirement. We intend to generate significant capital for our investors, given our earnings power and the upcoming divestitures,” Ms. Fraser concluded.
Nevertheless, Citigroup remains one of the most affordable of the six largest U.S. banks from a valuation perspective. The stock has plummeted 27% within 2022, as of Thursday’s close, with shares reaching a 52-week low.