Citigroup has reported first half net profits
of $7.12bn, up 21% from the corresponding period last year. Second
quarter profits of $2.7bn were down from $4.28bn in the year-ago
quarter, when Citi was boosted by a one-off gain arising from the
sale of brokerage Smith Barney.
Citi’s regional consumer banking unit posted
first half profits up by 80% at $2.2bn.
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Group wide, net interest revenue was 11% up in
the first half at $28.6bn but fees and commissions slipped 15% to
$6.9bn.
Total deposits fell by 3% to $813.9bn.
First half total provisions for credit losses
fell by more than a third to $15.3bn.
Despite repaying $20bn to the US Treasury at
the end of last year, Citi remains 18% owned by the Treasury.
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By GlobalData“I am pleased that we have produced solid operating results for
the second consecutive quarter,” said Vikram Pandit, Citi CEO.
“Although economic conditions remain challenging and global
regulatory frameworks are uncertain, we believe these results
demonstrate that the difficult decisions made by our management
team have put in place all the elements for sustained
profitability.”
Second quarter revenue at Citi’s retail focused consumer banking
unit dipped 1% to $8bn, with declines in the US and Europe
partially offset by continued growth in Asia and Latin America.
In the past 12 months, Citi has shuttered one in four of its
EMEA-based branches with the network declining from just over 400
units to 304 outlets.
By contrast, Citi’s Latin American branch network has grown by
7% to total 2,205 units.
Second quarter retail deposits were up only 1% at $291bn while
average retail loans dipped 2% to $218bn.
North American retail revenue was down by 3% in the second
quarter year-on-year, driven by a $151 million decrease in
Citi-branded card revenues.
The decline in card revenues primarily reflects the impact of
The Credit Card Accountability Responsibility and Disclosure Act,
as well as lower card volumes. Average card loans decreased 4% to
$76.2 billion, mainly due to higher payment rates and fewer
accounts, partially offset by a 9% increase in purchase sales.
In June, Citi was the only major US card issuer to report an
increase both in write-offs and late card payments (see US card write-offs fall but Citi bucks
trend).
