UPDATE (8:00 a.m.):Citigroup reported better-than-expected second quarter results this morning, posting net income of $3.1 billion when excluding one time adjustments, or $1.00 per share, fuelled by results in its North American operations.
Revenue was light however, with the firm earning just $18.64 billion during the three months ended in June, a 9.5 per cent decline from the year ago period.
Economists polled by Bloomberg had forecast earnings per share of $0.89, on top line results of $19.0 billion.
“Our core businesses performed well in a difficult environment and are generating solid returns. We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services,” Citi CEO Vikram Pandit said.
Net income improved 14 per cent in the firm’s North American offices, as revenue improved within consumer banking and transaction services.
Latin America and Asian profits fell both sequentially and from June 2011, mostly on weakness at the retail banking level. Both regions saw growth in securities services, which includes investment banking.
Citi’s investment bank saw revenues decline 21 per cent year-on-year, to $854 million. However the firm’s fixed income desk continued to power results within Citi’s securities unit, which includes investment banking, down four per cent to $2.8 billion.
Overall net income within Citi’s securities division improved 16 per cent year-on-year to $1.3 billion.
Credit quality continued to improve at the bank, with Citi’s allowance for expected loan losses declining 90 basis points year-on-year to 4.3 per cent of total loans, or $27.6 billion at quarter end.
Shares are up two per cent in pre-market trade.
ORIGINAL (7:39 a.m.):
Citigroup is scheduled to report second quarter results before the opening bell today, with analysts looking for the banking giant to post earnings of $0.89 per share.
Top line results are seen at $19.0 billion, a 7.8 per cent decline from the year ago period when it reported revenues of $20.6 billion.
Business Insider will be covering Citi’s earnings live, when announced at 8:00 a.m.
Deutsche Bank’s Matt O’Connor, who expects below consensus results of $0.78, said capital markets will be a key driver this period — although it will still represent a decline from the previous quarter.
O’Connor noted loan growth should continue to increase at a steady pace, while charge offs decline.
“We expect loan loss provisions to decline by 8 per cent quarter-on-quarter, driven by the absence of $370m of charge-offs in 1Q related to previously deferred principal balances on modified mortgages in Citi Holdings,” he says.