Citigroup (C) Q2 earnings and revenue beat estimates – July 15, 2022


Citigroup is (VS Free Report) in the second quarter of 2022, income from continuing operations per share of $2.30 significantly exceeded the Zacks consensus estimate of $1.67. However, the reported figure was down 19% from the prior year quarter.

After announcing better-than-expected earnings, the company’s shares rose 4.5% in premarket trading. The full day trading session will show a clearer picture.

Management noted, “Treasury and Commerce Solutions fired at full steam as clients took advantage of our global network, leading to the best quarter this business has had in a decade.

Citigroup recorded growth in both net interest income and non-interest income. However, a decline in investment banking revenue, loans and deposits were spoilsports.

Net income was $4.5 billion, down 27% from the year-ago quarter.

Income increases, expenses increase

Revenue, net of interest expense, rose 11% year-over-year to $19.6 billion in the second quarter. Revenue topped Zacks’ consensus estimate of $18.43 billion.

In the Institutional Clients Group industry, total revenue, net of interest expense, was $11.4 billion in the second quarter, up 20% year-over-year.

ThePersonal Banking and Wealth Management segment revenue grew 6% year-over-year to $6 billion.

Former franchises‘ Revenue of $1.9 billion was down 15% year over year.

Business/OtherRevenue was $255 million, up 12% from the prior year quarter.

Citigroup’s operating expenses rose 8% year over year to $12.39 billion.

The balance sheet position is deteriorating

At the end of the second quarter, Citigroup’s deposits were down 1% from the previous quarter at $1.32 trillion. The company’s loans fell slightly to $657 billion.

Credit quality is improving

Total unrecognized assets decreased 31% year over year to $3 billion. In addition, Citigroup’s total provision for credit losses on loans was $16 billion at the end of the quarter under review, compared to $19.2 billion a year ago.

However, Citigroup’s credit costs for the end-June quarter were $1.27 billion versus negative $1.06 billion in the year-ago quarter.

Decent capital position

At the end of the second quarter, Citigroup’s Common Equity Tier 1 capital ratio was 11.9%, compared to 11.8% in the second quarter of 2021. Additionally, the company’s incremental leverage ratio during the quarter under review was 5.6%, down from 5.8%.

Capital deployment

During the quarter under review, Citigroup returned $1.3 billion to shareholders through dividends and common stock repurchases.

Our point of view

The company has had encouraging results this time around. By advancing its retail banking exit strategy in 14 international markets, Citigroup aims to simplify operations and expand institutional franchises in targeted regions. Net interest income should be supported by rising rates going forward. However, high operating costs remain major headwinds.

Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dates of publication of the results of the other banks

Fifth Third Bancorp (FITB Free Report) is set to release its second quarter 2022 results on July 21.

Zacks’ consensus estimate for Fifth Third’s second-quarter earnings of 87 cents indicates a 7.5% decline from the year-ago quarter’s reported figure.

Citizen Financial Band (CFG Free Report) is set to release its second quarter 2022 results on July 19.

Zacks’ consensus estimate for Citizens Financial’s second-quarter profit of $1.02 points to a 30.1% decline from the year-ago quarter.


Comments are closed.