Citigroup profit drops 12% in Q2
Source: Agencies |
July 17, 2012, Tuesday
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CITIGROUP earned US$2.9 billion in profit in the April-to-June period, helped by lowering the amount it keeps aside for loan losses because more of its customers paid back loans on time.
The bank says it earned 95 US cents per share, exceeding the 89 US cents expected by analysts surveyed by data provider FactSet.
The income included a US$984 million decrease in the bank's loan loss reserves and an accounting gain of US$219 million because the value of its debt decreased.
Revenue was US$18.6 billion, down 10 percent from the year-ago quarter. Analysts expected US$18.8 billion.
Overall, Citigroup's net income declined 12 percent from the second quarter 2011 to US$2.9 billion. Income was hurt by a US$424 million loss the bank took from selling its 10 percent stake in Turkey's Akbank.
As more of its customers paid loans on time, Citi kept aside less for future losses - US$27.6 billion at the end of the quarter, compared with US$34.4 billion in the prior year period.
The volatility in the second quarter from the European debt crisis hurt Citi's earnings in the investment banking division. Investment banking revenue declined 21 percent to US$854 million.
Over the weekend, Citigroup said it will not seek to increase its dividend this year but may seek permission to raise it in 2013.
"I believe we will be in good shape and have the capital to be able to do that by the end of the year," CEO Vikram Pandit told the UK's Sunday Telegraph. "That's a decision that will have to be taken with our regulators, and we will have those conversations at the end of the year."
The bank did not ask the US Federal Reserve for permission to raise the dividend last month, when it submitted its latest capital plan.
Citi now pays a token 1 US cent per share every quarter.
The bank says it earned 95 US cents per share, exceeding the 89 US cents expected by analysts surveyed by data provider FactSet.
The income included a US$984 million decrease in the bank's loan loss reserves and an accounting gain of US$219 million because the value of its debt decreased.
Revenue was US$18.6 billion, down 10 percent from the year-ago quarter. Analysts expected US$18.8 billion.
Overall, Citigroup's net income declined 12 percent from the second quarter 2011 to US$2.9 billion. Income was hurt by a US$424 million loss the bank took from selling its 10 percent stake in Turkey's Akbank.
As more of its customers paid loans on time, Citi kept aside less for future losses - US$27.6 billion at the end of the quarter, compared with US$34.4 billion in the prior year period.
The volatility in the second quarter from the European debt crisis hurt Citi's earnings in the investment banking division. Investment banking revenue declined 21 percent to US$854 million.
Over the weekend, Citigroup said it will not seek to increase its dividend this year but may seek permission to raise it in 2013.
"I believe we will be in good shape and have the capital to be able to do that by the end of the year," CEO Vikram Pandit told the UK's Sunday Telegraph. "That's a decision that will have to be taken with our regulators, and we will have those conversations at the end of the year."
The bank did not ask the US Federal Reserve for permission to raise the dividend last month, when it submitted its latest capital plan.
Citi now pays a token 1 US cent per share every quarter.
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