Citigroup beats quarterly profit expectations

Reuters / No Comments Share:
The Citibank Corporate Office & Headquarters in midtown Manhattan in New York. Citigroup reported increased second-quarter earnings on Monday. AFP

(Reuters) – Citigroup Inc topped expectations for quarterly profit on Monday as a tight lid on costs and strength in consumer lending helped the third-largest US bank counter weakness in its trading business.

For in depth analysis of Cambodian Business, visit Capital Cambodia
.

New York-based Citi is the first major bank to report second-quarter earnings. Fellow Wall Street titans JPMorgan Chase & Co, Bank of America Corp and Goldman Sachs Group Inc report later in the week.

Bank stocks have lagged the market in recent weeks on concerns that net interest margins, a key measure of bank profitability, have peaked as the Fed gets ready to start cutting interest rates.

Citi’s interest margin declined slightly to 2.67 percent from 2.70 percent a year earlier and 2.72 percent in the first quarter of 2019. But the bank was able to make more money from its lending activities during the quarter and net interest income rose 2 percent.

Overall revenue rose 2 percent to $18.76 billion, driven by 4 percent growth in Citi’s consumer business as customers spent more on their credit cards. Branded card revenue jumped 7 percent as more customers initially attracted with promotional offers started paying interest. Interest-earning card balances rose 10 percent.

Strength in its consumer sector helped offset softness in Citi’s Wall Street business and corporate banking.

Trading revenue remained challenged for a third consecutive quarter. Fixed-income trading fell 4 percent, excluding a gain from Citi’s investment in Tradeweb, while equities revenue declined 9 percent.

Corporate lending was 9 percent lower than the year-ago period. Citigroup Chief Financial Officer Mark Mason told reporters on a call that trade tensions have discouraged some corporate customers from taking out loans.

“There’s a bit of caution that many of the corporate clients are exercising, in particularly in Asia,” Mason said.

He said Citigroup’s loans to corporate clients in Asia were down about 5 percent, partly because of aggressive pricing by competitors, but also because of “some of the trade tensions.”

Share and Like this post

Related Posts

Previous Article

Acleda and UnionPay issue contactless cards

Next Article

US to raise bar for ‘made in America’ products