NEW YORK (AP) -- Citigroup said Friday its second-quarter net income dropped 10 percent to $2.7 billion even as its losses from failed loans fell. The drop in income reflects the bank's sale a year ago of the Smith Barney brokerage, which inflated its earnings at the time.
Citigroup Inc. joins JPMorgan Chase & Co. and Bank of America Corp. in reporting earnings that rose in the April-June period as loan losses fell. That's a positive sign for the economy, because it indicates that consumers are having an easier time paying their debts. But Citigroup, like the other banks, also had a decline in trading revenue because of the stock market's plunge this spring.
Citigroup was among the hardest hit banks by the financial crisis of 2008, and it was further hurt as many customers fell behind in loan payments during the recession. The bank's losses from failed loans fell 31 percent to $7.96 billion during the April-June period from $11.47 billion a year ago.
Like JPMorgan, Citigroup also removed some money from its reserves for future loan losses, which helps boost earnings. It's also an indication that the bank is becoming more confident that the worst of the defaults is over and that delinquency and default levels are likely to shrink in the coming quarters.
Citigroup removed $1.51 billion from its loss reserves during the quarter. A year earlier, the bank added $4 billion to those reserves.
The stock market's slump sent Citigroup's revenue from its securities and banking division down 11 percent from a year earlier to $6 billion. That was down 26 percent from the first quarter.
Citigroup said it earned $2.7 billion, or 9 cents per share, during the April-June period. That compares with $3 billion, or 49 cents per share, during the same quarter last year.
The year-ago period's profit was inflated because Citigroup recorded an after-tax gain of $6.7 billion during the quarter from the sale of a majority stake in Smith Barney to Morgan Stanley.
Analysts forecast the bank would earn 5 cents per share.
Total revenue fell 33 percent to $22.07 billion from $33.1 billion during the year-ago period. Citigroup's revenue fell just short of the $22.16 billion analysts had forecast.
Citigroup's stock fell 5 cents to $4.11 in pre-opening trading.
ليست هناك تعليقات:
إرسال تعليق