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Key Takeaways
- Citigroup stock rose in premarket trading Friday after the bank’s second-quarter profit exceeded expectations.
- The bank’s net income jumped 10% year-over-year to $3.2 billion, or $1.52 per diluted share.
- Revenue increased 4% after a strong showing from the banking and trading businesses.
- Citi’s operating expenses, in the spotlight after ending its restructuring program, declined 2%.
Shares of Citigroup ( C ) rose in premarket trading Friday after the bank’s second-quarter profit beat analysts’ estimates.
Citi’s net income of $3.2 billion was 10% higher than the year-ago quarter, while diluted earnings per share (EPS ) climbed to $1.52 from $1.33 last year, beating the $1.38 consensus estimate of analysts compiled by Visible Alpha.
The bank’s revenue rose 4% to $20.1 billion, a shade below estimates, on growth in banking and trading business segments. Equities trading revenue grew 37%, driven by gains in derivatives.
‘Rationalizing the Expense Base Is Starting To Pay Off’
“Growth in client investment assets drove stronger investment revenue, and our focus on rationalizing the expense base is starting to pay off,” Citi Chief Executive Officer (CEO ) Jane Fraser said.
Investors and analysts were watching for Citi’s cost management, especially since this is the first full quarterly report since Fraser’s massive restructuring program aimed at curbing costs ended in March .
The bank’s operating expenses fell 2% to $13.4 billion, even though the cost of credit grew, “primarily driven by higher cards net credit losses, partially offset by a lower allowance for credit losses (ACL).”
Citi stock was up 2.5% to $67.36 about 30 minutes before the opening bell Friday. It has gained roughly 30% year-to-date.