We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Citigroup (C) Q2 Earnings & Revenues Top Estimates, Costs Up
Read MoreHide Full Article
Citigroup Inc.’s (C - Free Report) second-quarter 2023 earnings per share (excluding divestiture-related impacts) of $1.37 have outpaced the Zacks Consensus Estimate of $1.31.
In the second quarter, Citigroup witnessed a decline in revenues due to lower revenues in the Institutional Clients Group. Also, the higher cost of credit was a spoilsport. Nonetheless, higher revenues in Personal Banking and Wealth Management segments were a bright spot.
Net income for the quarter was $2.91 billion, down 36% from the prior-year quarter.
Revenues Down, Expenses Increase
Revenues, net of interest expenses, moved down 1% year over year to $19.44 billion in the second quarter. The top line outpaced the Zacks Consensus Estimate of $19.36 billion.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $10.44 billion in the reported quarter, down 9% year over year. Our estimate for the same was $10.51 billion.
The Personal Banking and Wealth Management segment’s revenues increased 6% year over year to $6.39 billion. Our estimate for the metric was $6.73 billion.
Legacy Franchises’ revenues of $1.92 billion moved down 1% year over year. Our estimate for the metric was $1.99 billion.
Corporate/Other’s revenues were $677 million, surging from the prior-year quarter’s $255 million. Our estimate for the metric was $546.9 million.
Citigroup’s operating expenses increased 9% year over year to $13.57 billion. Our estimate for the metric was $13.75 billion.
Balance Sheet Position Mixed
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 increased 1% to $661 billion.
Credit Quality Improves
Total non-accrual loans declined 4% year over year to $2.58 billion. Allowance for credit losses on loans was $17.49 billion, down 10% year over year.
However, Citigroup’s costs of credit for the second quarter were $1.82 billion compared with the $1.27 billion recorded in the year-earlier quarter.
Capital Position Strong
At the end of the second quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13.3%, up from 12% in second-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was 6%, rising year over year from 5.7%.
Capital Deployment Solid
In the reported quarter, Citigroup returned $2 billion to shareholders in the form of common share dividends and share repurchases.
Our Viewpoint
More than a year after announcing plans to exit Banamex in Mexico, Citigroup decided to pursue an IPO of the business. The bank has been pursuing a carve-out of the ICG business since announcing its plan to exit the business through a sale or a public market alternative. The company expects the separation of the businesses to be completed in the second half of 2024 and the IPO to take place in 2025.
However, due to transformation expenses and business-led investments, expenses may flare up in the upcoming period, impeding bottom-line growth.
Webster Financial (WBS - Free Report) is scheduled to announce second-quarter 2023 numbers on Jul 20.
Over the past week, the Zacks Consensus Estimate for WBS’ quarterly earnings has moved marginally south to $1.49. It implies a 15.5% rise from the prior-year reported number.
Texas Capital Bancshares (TCBI - Free Report) is scheduled to announce second-quarter 2023 results on Jul 20.
Over the past seven days, the Zacks Consensus Estimate for TCBI’s quarterly earnings has moved marginally downward to 94 cents. It implies 59.3% growth from the prior-year reported number.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Citigroup (C) Q2 Earnings & Revenues Top Estimates, Costs Up
Citigroup Inc.’s (C - Free Report) second-quarter 2023 earnings per share (excluding divestiture-related impacts) of $1.37 have outpaced the Zacks Consensus Estimate of $1.31.
In the second quarter, Citigroup witnessed a decline in revenues due to lower revenues in the Institutional Clients Group. Also, the higher cost of credit was a spoilsport. Nonetheless, higher revenues in Personal Banking and Wealth Management segments were a bright spot.
Net income for the quarter was $2.91 billion, down 36% from the prior-year quarter.
Revenues Down, Expenses Increase
Revenues, net of interest expenses, moved down 1% year over year to $19.44 billion in the second quarter. The top line outpaced the Zacks Consensus Estimate of $19.36 billion.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $10.44 billion in the reported quarter, down 9% year over year. Our estimate for the same was $10.51 billion.
The Personal Banking and Wealth Management segment’s revenues increased 6% year over year to $6.39 billion. Our estimate for the metric was $6.73 billion.
Legacy Franchises’ revenues of $1.92 billion moved down 1% year over year. Our estimate for the metric was $1.99 billion.
Corporate/Other’s revenues were $677 million, surging from the prior-year quarter’s $255 million. Our estimate for the metric was $546.9 million.
Citigroup’s operating expenses increased 9% year over year to $13.57 billion. Our estimate for the metric was $13.75 billion.
Balance Sheet Position Mixed
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 increased 1% to $661 billion.
Credit Quality Improves
Total non-accrual loans declined 4% year over year to $2.58 billion. Allowance for credit losses on loans was $17.49 billion, down 10% year over year.
However, Citigroup’s costs of credit for the second quarter were $1.82 billion compared with the $1.27 billion recorded in the year-earlier quarter.
Capital Position Strong
At the end of the second quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13.3%, up from 12% in second-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was 6%, rising year over year from 5.7%.
Capital Deployment Solid
In the reported quarter, Citigroup returned $2 billion to shareholders in the form of common share dividends and share repurchases.
Our Viewpoint
More than a year after announcing plans to exit Banamex in Mexico, Citigroup decided to pursue an IPO of the business. The bank has been pursuing a carve-out of the ICG business since announcing its plan to exit the business through a sale or a public market alternative. The company expects the separation of the businesses to be completed in the second half of 2024 and the IPO to take place in 2025.
However, due to transformation expenses and business-led investments, expenses may flare up in the upcoming period, impeding bottom-line growth.
Citigroup Inc. Price, Consensus and EPS Surprise
Citigroup Inc. price-consensus-eps-surprise-chart | Citigroup Inc. Quote
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 Dates & Expectations of Other Banks
Webster Financial (WBS - Free Report) is scheduled to announce second-quarter 2023 numbers on Jul 20.
Over the past week, the Zacks Consensus Estimate for WBS’ quarterly earnings has moved marginally south to $1.49. It implies a 15.5% rise from the prior-year reported number.
Texas Capital Bancshares (TCBI - Free Report) is scheduled to announce second-quarter 2023 results on Jul 20.
Over the past seven days, the Zacks Consensus Estimate for TCBI’s quarterly earnings has moved marginally downward to 94 cents. It implies 59.3% growth from the prior-year reported number.