Citigroup (C) earnings in Q2 2022

Jane Fraser, CEO of Citi, says she is convinced that Europe will fall into recession as it faces the consequences of the war in Ukraine and the ensuing energy crisis.

Patrick T. Fallon | AFP | Getty pictures

Citigroup on Friday announced second-quarter results that beat analysts’ expectations for profit and revenue as the firm benefited from rising interest rates and strong trading results.

Here is what the bank reported compared to what Wall Street expected, based on a study by analysts from Refinitiv:

  • Earnings per share: $ 2.19 against expected $ 1.68
  • Revenue: $ 19.64 billion versus expected $ 18.22 billion

The bank’s shares rose 4.9% in pre-market trading.

Profits fell 27 percent to $ 4.55 billion, or $ 2.19 per share, from $ 6.19 billion or $ 2.85 a year earlier, the New York-based bank said in a statement. It hardly exceeded expectations for the quarter, as analysts have cut earnings estimates for the industry in recent weeks.

Revenue rose 11% higher than expected in the quarter to $ 19.64 billion, more than $ 1 billion above estimates, as the bank reaped more interest income and saw strong results in its trading department and institutional service business.

Of the four major banks that reported second-quarter results this week, only Citigroup exceeded revenue expectations.

“In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to cope with uncertain times, given our liquidity, credit quality and reserve levels,” said Citigroup CEO Jane Fraser in the announcement.

Corporate cash management, Wall Street trading and consumer credit cards performed well during the quarter, she noted.

Bank shares have been hammered this year due to concerns that the US is facing a recession which would lead to an increase in loan losses. Like the rest of the industry, Citigroup is also struggling with a sharp decline in investment banking revenue, offset by boost to trading results in the quarter.

Despite Friday’s share price rise, Citigroup remains the cheapest of the six largest US banks from a valuation perspective. The stock fell 27% in 2022 when it closed on Thursday as its shares hit a low of 52 weeks.

To help turn the company around, Fraser has announced plans to leave retail banking markets outside the U.S. and set medium-term return targets in March.

Earlier Friday, Wells Fargo announced mixed results as the bank set aside funds for bad loans and was hit by declines in its shareholding.

On Thursday, major rival JPMorgan Chase released results that missed expectations as it built up reserves for bad loans, and Morgan Stanley disappointed with a worse-than-expected slowdown in investment banking fees.

Bank of America and Goldman Sachs are scheduled to report results on Monday.

This story is evolving. Please come back for updates.

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