Citigroup issued a mixed second-quarter report Friday, highlighted by more credit-quality progress and overseas loan growth, while trading revenue declined and expenses rose.
Citigroup C -1.26% shares ticked down 7 cents to $38.95 in midday trades Friday. Banks stocks were mixed overall.
The nation’s third-largest bank by assets stuck by its stated game plan. Citigroup said it plans to return more capital to shareholders in 2012 and will meet capital requirements under global regulatory standards.
Citigroup Chief Financial Officer John Gerspach wouldn’t comment when the bank will either increase its dividend or buy back its common shares. But Citigroup could be a buyer of its own shares as long as its stock trades below its tangible book value, which it put at $48.75.
Currently, Citigroup shares are rated a buy by 18 of the 28 stock-equity analysts that cover the bank. That’s up from 11 at end of first quarter, based on FactSet Research data.
Credit quality at Citigroup continues to improve.
Citigroup released $2 billion in reserves that had been set aside to cushion against future loan losses. So far this year, the bank has moved $5 billion from its credit reserves back onto its income statement.
This helped boost second-quarter profit to $3.3 billion, or $1.09 a share, beating the average analyst estimate of 96 cents a share, according to FactSet Research. Profit was up 24% from the same 2010 quarter and the sixth consecutive profitable quarter for Citigroup.
Second-quarter revenue fell 7% to $20.6 billion from the year-ago period.
Consumer loans at least 90 days delinquent, excluding riskier toxic mortgages and other securities held in the bank’s special asset pool, slid 46%. Improving credit for Citi-branded cards was a major contributor.
International loan growth continued. Consumer banking loans grew 15% in Latin America and 10% in Asia. North America loans fell 9%.
However, Citigroup upped its operating expense forecast due to the weakening dollar against other currencies and higher legal expenses tied to servicing home-mortgage loans.
Securities and banking revenue dropped 8% to $5.5 billion, hit by an 18% decline in fixed income trading.
Citigroup also said it had $13B in net exposure to Greece, Portugal, Spain, Italy and Ireland, a level it called appropriate for a bank its size.
Year-to-date, Citigroup shares are off 17% compared to the 11% decline for the KBW Bank Index BKX -0.45% . By comparison, the S&P 500 is up 4%.
Citigroup C -1.26% shares ticked down 7 cents to $38.95 in midday trades Friday. Banks stocks were mixed overall.
The nation’s third-largest bank by assets stuck by its stated game plan. Citigroup said it plans to return more capital to shareholders in 2012 and will meet capital requirements under global regulatory standards.
Citigroup Chief Financial Officer John Gerspach wouldn’t comment when the bank will either increase its dividend or buy back its common shares. But Citigroup could be a buyer of its own shares as long as its stock trades below its tangible book value, which it put at $48.75.
Currently, Citigroup shares are rated a buy by 18 of the 28 stock-equity analysts that cover the bank. That’s up from 11 at end of first quarter, based on FactSet Research data.
Credit quality at Citigroup continues to improve.
Citigroup released $2 billion in reserves that had been set aside to cushion against future loan losses. So far this year, the bank has moved $5 billion from its credit reserves back onto its income statement.
This helped boost second-quarter profit to $3.3 billion, or $1.09 a share, beating the average analyst estimate of 96 cents a share, according to FactSet Research. Profit was up 24% from the same 2010 quarter and the sixth consecutive profitable quarter for Citigroup.
Second-quarter revenue fell 7% to $20.6 billion from the year-ago period.
International loan growth continued. Consumer banking loans grew 15% in Latin America and 10% in Asia. North America loans fell 9%.
However, Citigroup upped its operating expense forecast due to the weakening dollar against other currencies and higher legal expenses tied to servicing home-mortgage loans.
Securities and banking revenue dropped 8% to $5.5 billion, hit by an 18% decline in fixed income trading.
Citigroup also said it had $13B in net exposure to Greece, Portugal, Spain, Italy and Ireland, a level it called appropriate for a bank its size.
Year-to-date, Citigroup shares are off 17% compared to the 11% decline for the KBW Bank Index BKX -0.45% . By comparison, the S&P 500 is up 4%.
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