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Citigroup reported better-than-expected results for the second quarter, but the news failed to raise the stock.
Earnings for Citigroup (ticker: C) totaled $ 1.3 billion, or 50 cents a share, better than the 35 cents stock analysts expected, but 73% below earnings of $ 4.8 billion in the second 2019 quarter. Revenues of $ 19.8 billion were 5% higher than in the prior year quarter.
Shares fell 1.9% to $ 51.23 in early operations.
Like most banks, Citigroup has been hurt by the effects of the coronavirus pandemic on the economy. Low interest rates have hurt the sector and have increased provisions for expected credit losses. Shares fell approximately 34% this year, roughly in line with the performance of the KBW Bank Index (BKX).
Citigroup added $ 5.6 billion to its bad loan reserves in the second quarter, compared to $ 4.9 billion in the previous quarter. The bank made credit losses of $ 2.2 billion in the second quarter, marking a slight increase over the first quarter.
“While credit costs affected our net income, our overall business performance was strong during the quarter and we have been able to navigate the COVID-19 pandemic reasonably well,” said Michael Corbat, CEO of Citigroup, in a statement Tuesday.
Meanwhile, trading turned out to be a bright spot for the bank. Corbat called the result an “exceptional quarter”, noting a 68% increase in commercial fixed income business. Total commercial activity increased 48%.
JPMorgan Chase (JPM) and Wells Fargo (WFC) also reported second quarter results on Tuesday morning.
Write to Carleton English at [email protected]
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