Citigroup 2Q Earnings Down 37%; Trading Revenue Declines

Citigroup Chief Executive Vikram PanditHurt by a big drop in trading revenue, Citigroup reported a 37 percent slide in second-quarter profit to $2.7 billion, or 9 cents a share, compared to $4.28 billion, or 49 cents, a year ago.
Citigroup results topped Wall Street expectations of 5 cents a share, but a murky outlook pushed shares lower Friday for the No. 3 U.S. bank by assets.
Citi’s revenues declined $3.4 billion to $22.1 billion in the second quarter.
However, provisions for credit losses declined $2.billion, compared to the previous quarter, to $6.7 billion – the lowest level since the third quarter of 2007, reflecting continued improvement in credit quality, Citigroup said.
Citi – along with top competitors JPMorgan Chase and Bank of America – are grappling with lower revenue expectations, as banking reform laws and consumer fee restrictions take fuller effect in the second of 2010 and into next year.
Citigroup, as with its rivals, also took a hit from investment trading revenue – a source of positive earnings in recent quarters. For the second quarter of 2010, Citi’s trading revenue fell more than one-quarter, driven lower by fixed-income and equity markets.
“Although economic conditions remain challenging and global regulatory frameworks are uncertain, we believe these results demonstrate that the difficult decisions made by our management team have put in place all the elements for sustained profitability,” concluded Vikram Pandit, Citi’s chief executive officer.
See Citigroup’s second-quarter earnings report.

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