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Citigroup (C) Q2 Earnings Beat as Loan Demand Improves
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Citigroup Inc.’s (C - Free Report) second-quarter 2024 net income per share of $1.52 surpassed the Zacks Consensus Estimate of $1.40. The metric increased 14.3% from the year-ago quarter’s levels.
Shares of C have gained 3.3% in the pre-market trading on a higher-than-expected quarterly performance.
It witnessed a rise in total loans in the quarter. However, deposits declined on a year-over-year basis.
Net income in the quarter was $3.22 billion, increased 10.4% from the prior-year quarter’s levels.
Revenues Increase, Expenses Decrease
Revenues, net of interest expenses, moved up 3.6% year over year to $20.14 billion in the second quarter. The top line surpassed the Zacks Consensus Estimate of $20.03 billion.
In the Services segment, total revenues, net of interest expenses, were $4.68 billion in the reported quarter, up 3% year over year.
The Markets segment’s revenues increased 6% year over year to $5.09 billion.
Banking revenues of $1.62 billion moved up 30% year over year.
U.S. Personal Banking’s revenues were $4.92 billion, up 6% from the prior-year quarter’s tally.
In the Wealth segment, revenues were $1.81 billion in the reported quarter, rising 2% year over year.
Revenues in the All Other segment declined 22% year over year to $1.98 billion.
Citigroup’s operating expenses declined 2% year over year to $13.35 billion.
Balance Sheet Position Mixed
At the end of the second quarter, Citigroup’s deposits were down 3% from the prior quarter’s levels to $1.28 trillion. However, its loans increased 4% to $688 billion.
Credit Quality: Mixed Bag
Total non-accrual loans fell 13% year over year to $2.30 billion. However, C’s provisions for credit losses and benefits and claims for the second quarter were $2.48 billion, up 36% from the year-earlier quarter.
Nonetheless, the allowance for credit losses on loans was $18.20 billion, up 7% from the prior-year quarter’s levels.
Capital Position Strong
At the end of the second quarter, the bank’s Common Equity Tier 1 capital ratio was 13.6%, up from 13.4% in the second quarter of 2023. However, the company’s supplementary leverage ratio in the reported quarter was 5.9% compared with 6% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
The company’s second-quarter 2024 results have reflected strength driven by higher loan balances and lower expenses. The company’s revenue growth was largely driven by strength across all businesses, particularly in Banking, U.S. Personal Banking and Markets, offset by decline in All Other segment revenues.
The business transformation initiatives, including its consumer business exits and organizational simplification efforts, will help it in the long run. Focus on growth in the profitable business while eliminating non-viable segments will likely aid results in the long run.
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Citigroup (C) Q2 Earnings Beat as Loan Demand Improves
Citigroup Inc.’s (C - Free Report) second-quarter 2024 net income per share of $1.52 surpassed the Zacks Consensus Estimate of $1.40. The metric increased 14.3% from the year-ago quarter’s levels.
Shares of C have gained 3.3% in the pre-market trading on a higher-than-expected quarterly performance.
It witnessed a rise in total loans in the quarter. However, deposits declined on a year-over-year basis.
Net income in the quarter was $3.22 billion, increased 10.4% from the prior-year quarter’s levels.
Revenues Increase, Expenses Decrease
Revenues, net of interest expenses, moved up 3.6% year over year to $20.14 billion in the second quarter. The top line surpassed the Zacks Consensus Estimate of $20.03 billion.
In the Services segment, total revenues, net of interest expenses, were $4.68 billion in the reported quarter, up 3% year over year.
The Markets segment’s revenues increased 6% year over year to $5.09 billion.
Banking revenues of $1.62 billion moved up 30% year over year.
U.S. Personal Banking’s revenues were $4.92 billion, up 6% from the prior-year quarter’s tally.
In the Wealth segment, revenues were $1.81 billion in the reported quarter, rising 2% year over year.
Revenues in the All Other segment declined 22% year over year to $1.98 billion.
Citigroup’s operating expenses declined 2% year over year to $13.35 billion.
Balance Sheet Position Mixed
At the end of the second quarter, Citigroup’s deposits were down 3% from the prior quarter’s levels to $1.28 trillion. However, its loans increased 4% to $688 billion.
Credit Quality: Mixed Bag
Total non-accrual loans fell 13% year over year to $2.30 billion. However, C’s provisions for credit losses and benefits and claims for the second quarter were $2.48 billion, up 36% from the year-earlier quarter.
Nonetheless, the allowance for credit losses on loans was $18.20 billion, up 7% from the prior-year quarter’s levels.
Capital Position Strong
At the end of the second quarter, the bank’s Common Equity Tier 1 capital ratio was 13.6%, up from 13.4% in the second quarter of 2023. However, the company’s supplementary leverage ratio in the reported quarter was 5.9% compared with 6% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
The company’s second-quarter 2024 results have reflected strength driven by higher loan balances and lower expenses. The company’s revenue growth was largely driven by strength across all businesses, particularly in Banking, U.S. Personal Banking and Markets, offset by decline in All Other segment revenues.
The business transformation initiatives, including its consumer business exits and organizational simplification efforts, will help it in the long run. Focus on growth in the profitable business while eliminating non-viable segments will likely aid results in the long run.
Citigroup Inc. Price, Consensus and EPS Surprise
Citigroup Inc. price-consensus-eps-surprise-chart | Citigroup Inc. Quote
At present, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Banks
M&T Bank Corporation (MTB - Free Report) is slated to report second-quarter 2024 results on Jul 18.
Over the past month, the Zacks Consensus Estimate for MTB’s quarterly earnings per share has moved marginally south to $3.53.
Fifth Third Bancorp (FITB - Free Report) is scheduled to release second-quarter 2024 earnings on Jul 19.
The consensus estimate for FITB’s quarterly earnings has moved 3.7% north to 84 cents per share over the past 30 days.