Financial Results

Citigroup’s Second Quarter Results Beat Expectations

Amanda Cheesley, Deputy Editor, 18 July 2022

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Citigroup has released its second-quarter results for 2022 in New York, reporting better-than-expected figures.

Citigroup's second-quarter results show that revenue rose by a better-than-expected 11 per cent from the prior-year period, driven by increased rates, client activity in markets and continued momentum in the US cards businesses.

This was partially offset by a slowdown in investment banking activity as well as investment fee headwinds in global wealth management, Citigroup said in a statement.

According to the firm, revenue reached $19.6 billion in the second quarter, more than $1 billion over estimates, with growth in both net interest income as well as non-interest revenue.

Higher net interest income was primarily driven by the benefits of higher rates as well as strong volumes across institutional clients' group, personal banking and wealth management. Global wealth management revenues of $1.9 billion were nevertheless flat, as investment fee headwinds, particularly in Asia, were offset by growth in average deposits and loans, Citigroup said.

Non-interest revenue also increased, driven by fixed income markets and services in ICG, which more than offset lower non-interest revenue in investment banking in ICG and PBWM, the US bank stressed.

Profit, meanwhile, fell by 27 per cent to $4.5 billion from the prior-year period, driven by the higher cost of credit and higher expenses, partially offset by the increase in revenues, the group said. Citigroup’s effective tax rate was 19.8 per cent in the current quarter versus 15.7 per cent in the second quarter 2021. The higher tax rate for the current quarter reflected lower tax benefits related to certain non-US operations, the bank added.

Earnings per share of $2.19 also decreased by 23 per cent from the prior-year period, reflecting the lower net income, partly offset by an approximate 4 per cent decline in shares outstanding, the bank said. Due to the better-than-expected results, shares of the bank increased by 5.4 per cent in early New York trading.

Citi CEO Jane Fraser said: “Trading volatility continued to create strong corporate client activity for us, driving revenue growth of 25 per cent in markets. While economic sentiment clearly impacted investment banking and wealth management, we continue to invest in these businesses and we like where they are headed.”

“In US personal banking, the positive drivers we saw in our two credit cards businesses over the last few quarters converted into solid revenue growth this quarter, most notably a 10 per cent growth in branded cards,” she added. “In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times, given our liquidity, credit quality and reserve levels,” she said.

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