Citigroup Q220 net income falls by 72% year-over-year to $1.3bn from $4.8bn but comfortably beat analysts’ forecasts.
The decline is primarily driven by substantially higher allowance for credit loss reserves reflecting the deterioration of the macroeconomic outlook.
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Revenues increase 5% from the prior-year period, primarily reflecting higher revenues in Fixed Income Markets and Investment Banking.
On the other hand, this is partially offset by lower revenues in Global Consumer Banking (GCB).
Michael Corbat, Citi CEO, says: “While credit costs weighed down our net income, our overall business performance was strong. We have been able to navigate the Covid pandemic reasonably well. The Institutional Clients Group had an exceptional quarter, marked by an increase in Fixed Income of 68%. Global Consumer Banking revenues are down as spending slowed significantly due to the pandemic.
“We entered this crisis from a position of strength. During the quarter, our regulatory capital increased and our CET1 ratio improved to 11.5%. This is comfortably above our new regulatory minimum of 10%. We continued to add to our substantial levels of liquidity and our balance sheet has plenty of capacity to serve our clients.”
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By GlobalDataCitigroup Q220 key retail banking metrics
Citi’s retail banking focused Global Consumer Banking (GCB) unit posts a loss of $396m in the second quarter. This compares with a net profit of $1.3bn in the year ago quarter.
Retail banking average loans and deposits rise by 3% and 10% respectively.
GCB revenues of $7.3bn decrease 10% on a reported basis and 7% in constant dollars. North America GCB revenues fall by 5% y-o-y to $4.7bn while Citi-branded cards revenues rise by 1% to $2.2bn.
Latin America GCB revenues fall by 20% to $1.1bn. The fall is driven by lower card purchase sales, a decline in loan volumes and lower deposit spreads.
Citigroup Q220 distribution metrics
Citi ends the second quarter with 687 branches in North America, unchanged from a year ago. In Latin America, the branch network is down by 53 outlets to 1,406 units.
Meantime, the branch network in Asia inches down by 18 branches to 234 outlets.
In North America, Citi reports a 12% rise in active mobile banking customers to 13 million.
Total digital banking customers in North America rise by 6% y-o-y to 20 million.
International active mobile banking customers are up by 22% to 11 million.
