Citigroup Inc. said its second-quarter revenue grew 2%, topping Wall Street's expectations, as its trading desk saw a smaller-than-anticipated drop-off in activity.
Quarterly profit at the New York-based bank was $3.872 billion, down 3% from $3.998 billion a year earlier. But per-share earnings were $1.28, up from $1.24 a year ago as Citigroup continued to buy back shares at a fast pace. Analysts had expected $1.21 a share.
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Revenue was $17.901 billion, defying forecasts of a decline from $17.548 billion a year ago, driven by upticks in consumer and corporate banking. Analysts had anticipated $17.367 billion.
Along with J.P. Morgan Chase & Co., which also reported earnings Friday, Citigroup's trading has suffered amid a pullback in volatility and activity in both the stock and bond markets. Citigroup is particularly active in trading around currencies and interest rates, which has dropped off with investors expecting a slow but steady series of rate increases by the Federal Reserve.
However, the drop-off wasn't nearly as sharp as anticipated, or as sharp as J.P. Morgan's. Citigroup's second-quarter trading revenue fell 7% to $3.906 billion from $4.208 billion a year ago. Last month, Chief Financial Officer John Gerspach predicted trading revenue would be down by 12% to 13% from a year ago.
The bank said Friday that it paid out 63% of its quarterly income in the form of dividends and share buybacks. Citigroup's stock has been the best performing among big banks in 2017, boosted by the June announcement of a plan to return $19 billion to shareholders in the next year -- about 30% more than it is expected to earn -- following the Fed's stress tests.
Citigroup's shares rose 0.2% to $67.16 in premarket trading.
Citigroup did benefit from higher short-term interest rates, which are passed on to credit-card borrowers. The bank relies more heavily on card loans than rivals. Revenue at the consumer unit rose 5% to $8.035 billion from $7.674 billion a year ago.
But profit in consumer banking fell, as the bank continues to increase its credit costs to account for growth in its card portfolio. Net income from global consumer banking dropped 12% to $1.125 billion from $1.284 billion a year ago.
Quarterly expenses rose 1% to $10.506 billion from $10.369 billion a year earlier.
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(END) Dow Jones Newswires
July 14, 2017 08:28 ET (12:28 GMT)