Citigroup Inc.’s (C Quick QuoteC - Free Report) second-quarter 2022 income from continuing operations per share of $2.30 have handily outpaced the Zacks Consensus Estimate of $1.67. However, the reported figure declined 19% from the prior-year quarter.

After reporting better-than-expected earnings, shares of the company moved up 4.5% in pre-market trading. The full-day trading session will display a clearer picture.

Management noted, “Treasury and Trade Solutions fired on all cylinders as clients took advantage of our global network, leading to the best quarter this business has had in a decade.”

Citigroup witnessed growth in both net interest income and non-interest revenues. However, a decline in investment banking revenues, loans and deposits were spoilsports.

Net income was $4.5 billion, decreasing 27% from the prior-year quarter.

Revenues Rise, Expenses Flare Up

Revenues, net of interest expenses, moved up 11% year over year to $19.6 billion in the second quarter. The top line outpaced the Zacks Consensus Estimate of $18.43 billion.

In the Institutional Clients Group segment, total revenues, net of interest expenses, were $11.4 billion in the second quarter, up 20% year over year.

ThePersonal Banking and Wealth Management segment’srevenues increased 6% year over year to $6 billion.

Legacy Franchises’ revenues of $1.9 billion declined 15% year over year.

Corporate/Other’s revenues were $255 million, improving 12% from the prior-year quarter.

Citigroup’s operating expenses rose 8% year over year to $12.39 billion.

Balance Sheet Position Deteriorates

At the end of the second quarter, Citigroup’s deposits were down 1% from the prior quarter to $1.32 trillion. The company’s loans declined marginally to $657 billion.

Credit Quality Improves

Total non-accrual assets declined 31% year over year to $3 billion. Also, Citigroup’s total allowance for credit losses on loans was $16 billion at the end of the reported quarter compared with $19.2 billion in the year-ago period.

However, Citigroup’s costs of credit for the June-end quarter were $1.27 billion against a negative $1.06 billion recorded in the year-earlier quarter.

Capital Position Decent

At the end of the second quarter, Citigroup’s Common Equity Tier 1 capital ratio was 11.9%, up from 11.8% in second-quarter 2021. Also, the company’s supplementary leverage ratio in the reported quarter was at 5.6%, down from 5.8%.

Capital Deployment

In the reported quarter, Citigroup returned $1.3 billion to shareholders in forms of common share dividends and repurchases.

Our Viewpoint

The company has delivered encouraging results this time around.Advancing its strategy to exit the consumer banking business in 14 international markets, Citigroup aims to simplify operations and expand institutional franchises in targeted regions. Net interest income is likely to be supported by the rising rates, going forward. However, elevated operating expenses remain major headwinds.

At present, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Banks

Fifth Third Bancorp (FITB Quick QuoteFITB - Free Report) is slated to report second-quarter 2022 results on Jul 21.

The Zacks Consensus Estimate for Fifth Third’s second-quarter earnings of 87 cents indicates a 7.5% decline from the prior-year quarter’s reported figure.

Citizens Financial Group (CFG Quick QuoteCFG - Free Report) is slated to report second-quarter 2022 results on Jul 19.

The Zacks Consensus Estimate for Citizens Financial’s second-quarter earnings of $1.02 indicates a 30.1% decline from the prior-year quarter.