Citigroup Beats On Q2, Shows Resilience Across Business Segments

Citigroup Inc C reported a second-quarter FY23 net revenue decline of 1% year-over-year to $19.44 billion, beating the consensus of $19.27 billion.

EPS was $1.33, above the consensus of $1.30.

Revenue decreased by 1%Y/Y, and EPS was $1.37, excluding the divestiture-related impacts. 

Institutional Clients Group revenue decreased by 9% Y/Y to $10.4 billion, with Services +15% Y/Y and Markets -13% Y/Y.

Personal Banking and Wealth Management revenue increased by 6% Y/Y to $6.4 billion, with US Personal Banking at +11% Y/Y and Global Wealth Management at -5% Y/Y.

Legacy Franchises' revenues decreased 1% Y/Y to $1.92 billion, driven by higher rates and volumes in Mexico.

Net income for the quarter was $2.9 billion, down 36% Y/Y. Operating expenses stood at $13.57 billion, an increase of 9% Y/Y.

Total allowance for credit losses on loans was ~$17.5 billion, with a reserve-to-funded loans ratio of 2.67%, compared to $16.0 billion, or 2.44% of funded loans in 2Q22.

Citigroup's end-of-period loans were $661 billion at quarter end, up 1% Y/Y. Deposits were ~$1.3 trillion at quarter end, essentially unchanged from the prior year.

Citigroup's book value per share of $97.87 (+5% Y/Y), and tangible book value per share of $85.34 (+6% Y/Y) at quarter end.

Outlook: Citigroup expects FY23 adjusted revenue of $78 billion - $79 billion vs. consensus $78.86 billion.

Price Action: C shares are trading higher by 1.4% at $48.35 premarket on the last check Friday.