Citigroup Earnings: A Mix of Good News and Disappointments

On a busy day for bank earnings, Citigroup (NYSE:C) was one of three big U.S. banks to report results, and despite an earnings beat, the report wasn’t great. While the bank’s efficiency was strong and loans and deposits grew, the bank missed expectations in several key areas, including trading revenue. Here’s a rundown of the numbers and how Citigroup’s earnings compare with the other big banks.

The headline numbers

Just looking at the headline numbers shows that Citigroup’s second quarter was a mixed bag. The bank earned $1.63 per share for the quarter, which handily beat the $1.56 that analysts had been looking for. Furthermore, this represents impressive 27% year-over-year earnings growth.

Man holding out hand with thumb sideways.

Citigroup’s earnings weren’t great, but they weren’t too bad, either. Image source: Getty Images.

To be fair, some of this was a result of tax reform, as the lower corporate tax rate in the Tax Cuts and Jobs Act lowered the bank’s effective tax rate to 24% from 32% a year ago.

However, revenue came it a bit light. Although the bank’s $18.47 billion in revenue is 2% higher than a year ago, it missed expectations by about $43 million.

Beyond the headlines: The good

To be clear, there were certainly some positive highlights in Citigroup’s earnings report. Here are a few of the most important ones for investors:

Some key misses

On the other hand, there was some disappointing news as well.

Not the best of the early bank earnings

Three of the big four U.S. banks reported earnings on Friday morning — Citigroup, JPMorgan Chase, and Wells Fargo (NYSE: WFC). JPMorgan Chase posted an excellent second quarter, including the excellent trading revenue performance. Wells Fargo, on the other hand, was largely a disappointment as the bank’s scandal-plagued past few years are clearly still weighing on its results.

Citigroup falls in the middle of the three. As I discussed, there was certainly some good news, but there were also some key disappointments.

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