Published July 15, 2013
Citigroup (C) revealed a 26% increase in adjusted second-quarter profit on Monday as equity trading ramped up and mortgage assets regained value amid the housing recovery.
The New York-based banking giant reported net income of $4.2 billion, or $1.34 a share, compared with a year-earlier profit of $2.9 billion, or 95 cents. Adjusted earnings were $3.89 billion, or $1.25 a share, topping average analyst estimates of $1.17 in a Thomson Reuters poll.
Earnings were fueled by higher revenue and a 25% decline in cost of credit as the value of mortgage assets rose with the housing recovery, partially offset by legal fees that pushed operating costs up 1% and a lower loan loss reserve release.
Revenue for the three-month period grew 11% to $20.5 billion from $18.4 billion in 2012, beating the Street’s view of $19.75 billion. Citicorp revenue increased 7% year-over-year to $18.9 billion on an adjusted basis, while revenue from equity trading surged 68% to $942 million from weak trading volumes in 2012.
“Our businesses performed well during the quarter and these results are well-balanced through our products and geographies, especially in the emerging markets, where growth is being challenged,” Citi CEO Michael Corbat said in a statement.
Shares of Citi climbed 2.6% to $52.13 ahead of the bell. They are up more than 91% year-to-date.