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Citigroup’s earnings are often watched as a barometer for global markets.
Photo: GABBY JONES for The Wall Street Journal
Citigroup Inc.
said Friday its second-quarter earnings slid 27%.
The bank reported a profit of $4.55 billion, or $2.19 per share, compared with $6.19 billion, or $2.85 a share, a year earlier. That beat the $1.68 per share expected by analysts polled by FactSet.
Revenue rose 11% to $19.64 billion, beating Wall Street’s forecast for $18.4 billion.
The profit was reduced by a $375 million charge to set aside funds for potential future loan losses. A year ago, the bank released $2.4 billion from its reserves, boosting profits in that period.
JPMorgan Chase
& Co., which reported Thursday, took a similar $428 million reserve. The charges belie the strength consumers and businesses continued to show in the second quarter, but reflect growing uncertainty among bankers about the future health of the U.S. economy.
In Citi’s institutional clients group, which contains its investment bank and serves corporate clients, revenue rose 20% and profit rose 16%.
Revenue in the consumer bank and wealth management operations rose 6% while its profit dropped 69% on the loan-loss reserves.
Citigroup has announced plans to sell international consumer businesses in an effort to simplify and focus the bank. Revenue fell and those businesses posted a loss.
Total loans fell, but increased for both big clients and consumers in businesses the bank isn’t selling. The bank’s profitability on lending increased thanks to the Federal Reserve’s interest rate hikes.
Write to David Benoit at david.benoit@wsj.com
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