Citigroup Beats on Profit as Trading Revenue Falls Less Than Expected

Citi scores Q2 beat; trading desk sees smaller than expected activity drop-off

Citi scores Q2 beat; trading desk sees smaller than expected activity drop-off

Like its rival JPMorgan Chase, Citigroup saw a sizable increase in interest income.

A renewed focus on investment banking, including some big hires, is helping Citigroup lure clients, boost revenue and gain on its larger competitor.

The trading falls limited second-quarter revenues at Citi's institutional clients group as a whole to $9.2bn, roughly matching the first three months of 2017 and 6% higher than a year ago.

"The $3.9 billion of net income helped generate additional regulatory capital".

Citi's institutional clients group houses the U.S. bank's advisory, underwriting and sales and trading businesses, as well as treasury and trade solutions, corporate lending, private banking and securities services. Across the industry, big investors have been trading less, and some companies have been delaying deals, waiting to see if US lawmakers can carry out promised tax and regulatory reforms.

The New York City-based banking giant reported Q2 earnings per share (EPS) of $1.28, which was $0.07 better than the Wall Street consensus estimate of $1.21. The results still beat analysts' forecasts of $1.21 a share, according to FactSet. In late June, the Federal Reserve cleared the way for the firm to pay out more capital to shareholders.

The bank said Friday that it paid out 63% of its quarterly income in the form of dividends and share buybacks. Year-to-date, C has gained 13.40%, versus a 10.36% rise in the benchmark S&P 500 index during the same period.

Bank stocks, which have rallied strongly in recent weeks, ran out of gas on Friday. Non-interest costs rose 1 percent to $10.5 billion, compared with analysts' $10.2 billion estimate. Citi's institutional clients group earned $2.76 billion, up 6 percent from a year earlier.

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