CITI CRUSHES EARNINGS (C)
Citigroup just beat second quarter earning estimates.
For the second quarter, the bank reported adjusted EPS of $1.24.
According to analysts polled by Bloomberg, the bank was expected to post adjusted EPS of $1.06.
Revenue came in at $19.375, which was lower than the first quarter but higher that analysts' expectations.
Revenue for Q2 was expected to come in at $18.81 billion, data compiled by Bloomberg shows.
This morning, the bank said it agreed to a $7 billion settlement over an investigation related to the firm's mortgage practices.
"Despite the significant impact of today’s settlement on our net income, our capital position strengthened to an estimated Tier 1 Common ratio of 10.6% on a Basel III basis, and our tangible book value increased," Citi CEO Michael Corbat said in the release.
Also during Q2, the bank reduced its headcount from 149,000 to 145,000. A chart from the bank shows that they would like to be under 145,000 by the fourth quarter of 2014.
The stock was last trading up more than 3% in the pre-market.
From the release:
Citigroup Reports Second Quarter 2014 Earnings Per Share of $0.03; $1.24 Excluding CVA/DVA1 and Impact of Mortgage Settlement2
NET INCOME OF $181 MILLION; $3.9 BILLION EXCLUDING CVA/DVA AND IMPACT OF MORTGAGE SETTLEMENT
REVENUES OF $19.3 BILLION; $19.4 EXCLUDING CVA/DVA
NET INTEREST MARGIN INCREASED TO 2.87% VERSUS PRIOR YEAR PERIOD
NET CREDIT LOSSES OF $2.2 BILLION DECLINED 16% VERSUS PRIOR YEAR PERIOD
UTILIZED APPROXIMATELY $1.1 BILLION OF DEFERRED TAX ASSETS
ESTIMATED BASEL III TIER 1 COMMON RATIO OF 10.6%3
ESTIMATED BASEL III SUPPLEMENTARY LEVERAGE RATIO OF 5.7%4
BOOK VALUE PER SHARE INCREASED TO $66.76
TANGIBLE BOOK VALUE PER SHARE5 INCREASED TO $56.89
CITIGROUP DEPOSITS OF $966 BILLION GREW 3% VERSUS PRIOR YEAR PERIOD
CITICORP LOANS OF $585 BILLION GREW 8% VERSUS PRIOR YEAR PERIOD
CITI HOLDINGS ASSETS OF $111 BILLION DECLINED 15% FROM PRIOR YEAR PERIOD
AND REPRESENTED 6% OF TOTAL CITIGROUP ASSETS AT QUARTER END
Citigroup Inc. today reported net income for the second quarter 2014 of $181 million, or $0.03 per diluted share, on revenues of $19.3 billion. This compared to net income of $4.2 billion, or $1.34 per diluted share, on revenues of $20.5 billion for the second quarter 2013. Second quarter 2014 results included the impact of a $3.8 billion charge ($3.7 billion after-tax) to settle RMBS and CDO-related claims, which consisted of $3.7 billion in legal expenses and a $55 million loan loss reserve build, each recorded in Citi Holdings.
CVA/DVA was negative $33 million (negative $20 million after-tax) in the second quarter 2014, compared to positive $477 million ($293 million after-tax) in the prior year period. Excluding CVA/DVA in both periods, second quarter revenues of $19.4 billion declined 3% from the prior year period. Excluding CVA/DVA and the impact of the mortgage settlement in the second quarter 2014, earnings were $1.24 per diluted share, a 1% decline from prior year earnings of $1.25 per diluted share.
Michael Corbat, Chief Executive Officer of Citi, said, “Our businesses showed resilience in the face of an uneven economic environment. During the quarter, we continued to grow loans in our core businesses, reduce operating expenses by simplifying our products and processes and utilize our deferred tax assets. Despite the significant impact of today’s settlement on our net income, our capital position strengthened to an estimated Tier 1 Common ratio of 10.6% on a Basel III basis, and our tangible book value increased.”