Citigroup profit on consumer banking strength

NEW YORK: Citigroup Inc’s quarterly profit topped Wall Street estimates on Friday, helped by strength in its consumer banking business in Mexico, North America and Asia.

The third-largest US bank by assets, like its peers, also benefited from a cut in income tax rates and an expanding US economy that fuelled demand for loans.

Net income rose to $4.49 billion in the second quarter ended June 30, from $3.87 billion a year earlier, driven by a 14 per cent jump in net income for its global consumer banking.

Pretax profit from continuing operations increased 5 per cent.

Earnings per share rose to $1.63 from $1.28 and topped analysts’ average estimate of $1.56, according to Thomson Reuters I/B/E/S.

The bank’s provision for income tax fell by $351 million, following President Donald Trump’s corporate tax rate cuts.

Buy-backs reduced shares outstanding by 8 per cent from a year earlier, further boosting earnings per share.

Revenue rose about 2 per cent to $18.47 billion but came in slightly below the average expectation of $18.51 billion as revenue from its investment banking business fell 7 per cent.

The bank’s fixed income trading revenue fell 6 per cent, while equity trading revenue rose 19 per cent. Total markets and securities services revenue fell 1 per cent.

Last month, Chief Financial Officer John Gerspach said he expected trading revenue to be “flattish” compared with a year earlier.

Through Thursday, Citigroup shares are down 7.9 per cent for the year, compared with the 1 per cent drop in the broader KBW Bank Index.