Citigroup Q2 Earnings: Personal Banking Growth, Profit Growth, In-line Outlook And More

Citigroup Inc C reported a second-quarter fiscal 2024 revenue growth of 4% year-over-year to $20.14 billion, beating the analyst consensus estimate of $20.07 billion. GAAP EPS of $1.52 beat the analyst consensus estimate of $1.39.

Net credit losses were $2.28 billion, up 52% year-over-year. 

Services revenue grew 3% year-over-year to $4.7 billion, primarily reflecting strength in Securities Services and the impact of continued underlying momentum in Treasury and Trade Solutions.

Markets revenue increased by 6% Y/Y to $5.1 billion, driven by Equity market revenue growth.

Banking revenue increased 38% Y/Y to $1.6 billion, driven by Investment Banking and Corporate Lending.

U.S. Personal Banking revenue grew 6% Y/Y to $4.9 billion, driven by higher net interest income.

Wealth revenue grew 2% to $1.8 billion, driven by a 13% increase in non-interest revenue.

All other revenue declined 22% year over year to $2.0 billion, primarily due to closed exits and winddowns and higher investment portfolio funding costs. 

Net income of $3.2 billion increased 10% year over year, primarily due to higher revenues. Operating expenses stood at $13.4 billion, a decrease of 2% year over year.

The total allowance for credit losses on loans was $18.2 billion, with a reserve-to-funded loans ratio of 2.68%, compared to $17.5 billion, or 2.67% of funded loans, at the end of the prior-year period.

Citigroup’s end-of-period loans were $688 billion at the quarter’s end, up 4% year over year, mainly reflecting growth in U.S. Personal Banking and higher loans in Markets and Services. 

At quarter end, deposits were ~$1.3 trillion, down 3% from the prior year. It was primarily due to a reduction in Treasury and Trade Solutions, reflecting quantitative tightening.

At the end of the quarter, Citigroup’s book value per share was $99.70 (+2% Y/Y), and its tangible book value was $87.53 (+3% Y/Y).

Dividend: In June, several prominent U.S. banks, including Citigroup, raised their dividend per share for the third quarter following their successful performance in the Federal Reserve’s annual stress test. Citi boosted its dividend per share to $0.56 from the current $0.53.

Outlook: On June 18, at the investor day presentation, Citigroup reiterated its fiscal 2024 adjusted revenue outlook of $80.00 billion—$81.00 billion vs. the consensus of $80.68 billion. The bank said it is well positioned in payments to support the digital transformation of institutional clients and looked to expand Citi payments express to 30 plus countries over the next 30 months.

The bank said securities services will continue to enhance ETF servicing capabilities and integrated global markets offerings. Citigroup CEO Jane Fraser noted US Personal Banking was adjusting expenses to increase returns.

He said that Services business moves $5 trillion daily and expects continued growth after last year’s record results.

Citi CFO Mark Mason expected banking to win tech and healthcare deals. Citi services head Shahmir Khaliq said e-commerce revenues may grow 12 to 15% annually.

Citigroup stock gained 39% in the last 12 months.

Price Action: C shares are trading lower by 0.91% at $65.11 at the last check on Friday.

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