As a result of higher interest payments from borrowers, Citigroup (C.N) surpassed analysts’ expectations for second-quarter profit on Friday, partially offsetting a blow to its Wall Street companies from a decline in trading slump and growing expenses.
In the three months ending June 30, the bank’s net income fell 36% to $2.92 billion, or $1.33 per share.
Higher costs for layoffs and greater reserves for credit losses, according to the bank, pulled down the earnings.
Investment banking fees fell 24% to $612 million, while market revenue dropped 13% to $4.6 billion.
The decline in Citi’s net income contrasted with stronger earnings at Wells Fargo(WFC.N) and JPMorgan Chase(JPM.N), which benefited from the acquisition of First Republic Bank and earned more from interest payments.
At the most international US lender, Citi’s net interest income (NII) increased 18%, matching rises at JPMorgan and Wells Fargo.
Citigroup’s Earnings Per Share Beat Analyst Predictions
The net interest margin (NII) gauges how much money banks make on loans and lose on deposits.
The results coincide with growing speculation that the Federal Reserve’s significant rate increases, which have increased profitability at major US banks in recent quarters, may be coming to an end.
Citigroup increased its $1 billion NII forecast for the entire year. Credit card delinquency rates are increasing and are anticipated to approach “normal levels” by the end of the year in other retail lines as well.
Both Citi’s services division and treasury and trade solutions (TTS), which corporate executives have referred to as the company’s “crown jewel,” reported double-digit revenue growth.
According to Refinitiv IBES statistics, Citi earned $1.37 per share after one-time items, exceeding the $1.30 analysts had predicted.
In view of the Federal Reserve’s increased capital requirements, Mason stated that the bank has not yet made a decision regarding potential share buybacks in the third quarter.