Citigroup shares rise as earnings beat expectations – but profits still drop
Citigroup shares rose in pre-market trading in New York, after it reported a dip in profits and earnings – but still beat expectations.
The figures
In a statement posted today, the investment banking giant said revenues fell eight per cent to $17.5bn (£1.31bn) in the second quarter, down from $19.2bn during the same period last year.
Adjusted net income fell 14 per cent to $4bn – although that figure was up 14 per cent on the previous quarter.
Meanwhile, diluted earnings per share hit $1.24, down from the $1.51 reported this time last year – but way above the $1.10 analysts polled by Thomson Reuters had expected.
Shares rose 1.1 per cent to $44.92 in early trading in New York.
Why it's interesting
2016 hasn't been an easy year to be in investment banking – in April, Citi posted a 27 per cent decline in first quarter profits thanks to the volatility which has plagued markets this year took its toll on one of the US' largest lenders. So far this year, the lender's shares are down 15 per cent.
But today's figures are sure to have cheered investors: its above-expectations revenues (analysts had hoped for $17.47bn) suggest that market turmoil might not have had the negative effect they had thought.
But there's still the looming spectre of Brexit, and what it might do to global markets, which has haunted bank investors over the past few weeks – and may continue to give them the shivers over the next few months.
What Citi said
Chief executive Michael Corbat said:
These results demonstrate our ability to generate solid earnings in a challenging and volatile environment, again highlighting the resilience of our institution. Nearly all of our net income came from our core businesses and we continued to reduce non-core assets in Citi Holdings.
In short
Reasonable results in a less-than-ideal environment. But the future may hold further volatility.