Citigroup Inc. (NYSE: C) shares weakened last week despite the fact that this bank reported better than expected second-quarter earnings.
Fundamental analysis: Citigroup’s outlook remains stable
Citigroup reported its second-quarter results on Wednesday; total revenue has decreased by -11.6% Y/Y to $17.47 billion, while the GAAP EPS was $2.84 (beats by $0.88). Total revenue has decreased below the expectations (beats by $290 million), and the bank’s management expects the accelerating trends in the third quarter.
Citigroup reported $6.2 billion in net income for the second quarter, and it is important to mention that for the first two quarters of 2021, Citigroup returned close to $7 billion to its shareholders (this was the maximum amount permitted under the Federal Reserve’s rules). CEO Jane Fraser said that the pace of the global recovery is exceeding earlier expectations, and because of this, the outlook for bank returns is significantly more favorable currently than even a few months ago.
CEO Jane Fraser also said that the Investment Banking franchise continues to perform well with good momentum in M&A and a very solid pipeline ahead for the rest of the year. The business of the bank continues to be impacted by lower rates, but the U.S. Federal Reserve is forecasting two interest-rate hikes before the end of 2023.
“We are continuing to see robust client engagement and strong underlying growth in our fee businesses across the franchise, including TTS, Investment Banking, Securities Services, Commercial Banking, and the Private Bank. And excluding the markets-related component, non-interest revenues were up 24% this quarter, and we are confident in our outlook for continued strong fee growth in the back half of the year,” said Mark Mason, CFO of Citigroup.
Citigroup continues to respond to
