The bank’s second-quarter earnings report gave investors a lot to be happy about.
Citigroup kicked off bank earnings season with strong second-quarter results. Wells Fargo, Bank of America, and JP Morgan Chase are all expected to post quarterly earnings report later this week.
Citigroup’s earnings and revenue beat investor expectations. As a result, the company’s shares were up 1.5% in pre-market trading. The bank hit a large downturn toward the end of 2018 but its shares are 37% year to date. It has consistently outpaced the S&P 500, which is up 20% in 2019.
Details About the Earnings Report
During the second quarter, Citigroup earned $18.8 billion in revenue, which is up 2% from a year earlier. A significant portion of this came from the company’s investment in Tradeweb, a company that went public in April.
Quarterly profits reached $4.8 billion, which is a 7% increase from a year earlier. And earnings reached $1.95 per share, which is much higher than the $1.81 per share expected by investors.
CEO Michael Corbat stated in the bank’s press release, “We navigated an uncertain environment successfully by executing our strategy, and by showing disciplined expense, credit and risk management.”
It wasn’t all good news for Citigroup as corporate and institutional revenue fell mostly flat. And Citigroup’s investment banking revenue fell 10%. The bank’s global banking revenue did increase by 3%.
And revenue for its U.S. consumer banking was up 3% as well. Citigroup has also been investing heavily in its U.S. retail presence, mostly through digital and mobile banking.
What’s Next for Citigroup?
Citigroup has done a number of things right in 2019. It focused on cutting costs and cut its expenses by 2% during the second quarter. The bank also invested in technology that helped it improve its efficiency. And in June, Citigroup gained approval from the Federal Reserve to pay out an additional $21.5 billion to investors over the next 12 months.
However, a number of challenges still lie ahead for Citigroup. Big banks have been under pressure thanks to market volatility. And there is still a strong possibility that the Fed could cut interest rates, which would hurt the bank’s ability to be profitable.
