Citigroup has turned in its report for the year’s second quarter, surpassing Wall Street’s expectations by a notable margin.
This was seen in both its profits and revenue, which increased to $1.52 a share and $20.14 billion, respectively, when Wall Street predicted $1.39 a share and $20.07 billion.
Citigroup Inc.
Citigroup Inc. (or Citi) is the third-largest barking firm by assets in the whole of the United States. It is an American-founded multinational investment bank and financial company headquartered in New York City.
Citicorp and Travelers merged in 1998 to form Citigroup, which is now one of the top banks in the world. In 2023, Forbes ranked Citigroup number 24 on its infamous Forbes Global 2000 and number 36 on the Fortune 500 list.
Citigroup’s Second-Quarter Results
Citigroup published its second-quarter results for the year 2024 sometime in July. This report covered the company’s dealings from the beginning of April until the last fiscal day of June, showing its revenue and earnings in those three months.
According to the company’s report, Citigroup generated a revenue of $20.14 billion in those three months. Its earnings also increased to $1.52 per share between April and June.
Surpassing Expectations
The company surpassed the Wall Street predictions the London Stock Exchange Group (LSEG) reported and shared. In the second quarter of the year, their predictions for profit and revenue were surpassed, and their net income jumped 10% as well.
Its earnings were reported at $1.52 a share, compared to the $1.39 a share that Wall Street expected. The same goes for the reported revenue of $20.14 billion, compared to Wall Street’s $20.07 billion.
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Equity Trading Revenue
Equities trading revenue is the revenue obtained from buying and selling company shares or stocks, also known as equities, on the financial market. The Citigroup report shows that equities trading revenue greatly increased between April and June.
It rose 37% to $1.5 billion, and this was driven by a rise in hedge fund balances and strength in derivatives. According to a StreetAccount estimate, this amounted to roughly $300 million.
Fixed Income Revenue
Fixed income revenue refers to assets and securities that always pay investors a set income, usually in the form of dividends or fixed interest.
The most popular forms of fixed-income revenue are government and corporate bonds, which usually have lower risk and lower returns. Citigroup’s fixed income revenue was reduced by 3% to $3.6 billion, which was just as analysts expected due to lower activity in currency markets.
Investment Banking Revenue
The bank group also reported investment banking revenue in the second-quarter report. This refers to the commissions and fees charged for its services, such as advisory fees and underwriting new securities issues via bond offerings or stock IPOs.
It also serves as an asset manager for its clients, and this revenue surged by 60% in the second quarter of the year to $853 million. This can be attributed to the issuance of investment-grade bonds and a rebound in IPO and merger activity from low levels in 2023.
A Positive Report
This report is undoubtedly very positive for the banking giant. It surpassed many expectations and had more gains than losses in the second quarter of the year.
Many other giants in several sectors reported mixed or poor results in their second-quarter reports, and Citigroup is one of the big corporations with an overall positive one. Therefore, it is something for its executives to be immensely proud of.
CEO’s Statement
In the report release, Jane Fraser, Citigroup’s CEO, said, “Our results show the progress we are making in executing our strategy and the benefit of our diversified business mode.” She continued, “Markets had a strong finish to the quarter, leading to better performance than anticipated.”
Therefore, the CEO and other executives are proud of the second quarter’s performance and hope to maintain it for the rest of the year.
More Predicted Growth for Second Half and Next Quarter
If the banking giant can keep this going for the next two quarters of the year, it will help them close this year on a positive note. It will also signify growth in the company even with many uncertainties in the country.
Moreover, the company’s executives and investors will be quite satisfied as they will not be closing the year with a negative report but with a lot of gains in both profit and revenue.
ALSO READ: Inflation in the U.S. Falls by 0.1% With a Similar CPI Drop
Pending Issues
However, the company has been constantly rebuked for failing to fix its regulatory shortfalls. Just last year, Citigroup’s CEO announced plans to simplify the management structure and reduce costs.
The company must fix this pending issue as the third-biggest U.S. bank by assets. If it cannot appease regulators’ concerns about its data and risk management in the coming weeks, its earnings might decline later this year.
First Quarter Report
Citigroup has been having a good year, beating Wall Street expectations in both the first and second quarters of 2024. In the first quarter, its earnings were $1.86 per share, compared to the $1.23 per share expectation.
A similar trend was seen with its revenue. It generated $21.10 billion when Wall Street predicted an income of $20.4 billion. Therefore, its first-quarter figures are just as impressive as the second.
Other Banks Also Surpassed Expectations
Citigroup is not the only big bank that surpassed its Wall Street second-quarter expectations. Bank of America saw a 5% jump in shares as it reported a $25.54 billion revenue compared to the predicted $25.22 billion.
Goldman Sachs falls into this same category, with revenue of $12.73 compared to the $12.46 billion estimate. JPMorgan Chase also saw a good second quarter after its revenue rose by a staggering 20% to $50.99 billion.
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