• July 13, 2017
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Citigroup releases Q2 2017 results

• Earnings per share of $1.28
• Net income of $3.9 Billion
• Revenues of $17.9 Billion
• Returned $2.2 Billion of capital to common shareholders
• Repurchased 29 Million common shares
• Book value per share of $77.36
• Tangible book value per share of $67.32

Citigroup Inc. reported net income for the second quarter 2017 of $3.9 billion, or $1.28 per diluted share, on revenues of $17.9 billion. This compared to net income of $4.0 billion, or $1.24 per diluted share, on revenues of $17.5 billion for the second quarter 2016.

Revenues increased 2% from the prior year period, driven by growth in Institutional Clients Group (ICG) and Global Consumer Banking (GCB), partially offset by lower revenues in Corporate / Other. Net income of $3.9 billion decreased 3%, as the higher revenues were more than offset by higher cost of credit and operating expenses, as well as a higher effective tax rate.

Earnings per share of $1.28 increased 3% from $1.24 per diluted share in the prior year period, driven by a 6% reduction in average diluted shares outstanding, partially offset by the lower net income. In the discussion throughout the remainder of this press release, percentage comparisons are calculated for the second quarter 2017 versus the second quarter 2016, unless otherwise specified.

Citi CEO Michael Corbat said:

“During the quarter, we saw continued momentum in our businesses, with loan and revenue growth across both sides of the house. Our Global Consumer Bank posted revenue growth in all three regions. Our Institutional Clients Group had a very strong quarter all-around, including its best Investment Banking performance in seven years.

“The $3.9 billion of net income helped generate additional regulatory capital. Our Common Equity Tier 1 capital ratio grew to 13.0%, well above the 11.5% we believe we need to prudently operate the firm. Our recently announced 2017 capital plan includes a return of $18.9 billion enabling us to reduce the amount of capital we hold. We are clearly on course to increase both the return on capital and return of capital for our shareholders,” Mr. Corbat concluded.

Citigroup revenues of $17.9 billion in the second quarter 2017 increased 2%, driven by a 6% increase in ICG, as well as a 5% increase in GCB, partially offset by a 45% decrease in Corporate / Other due to the continued winddown of legacy assets. Excluding the impact of foreign exchange translation, Citigroup revenues increased 3%.

Citigroup’s net income decreased to $3.9 billion in the second quarter 2017, as the higher revenues were more than offset by higher cost of credit and operating expenses, as well as a higher effective tax rate. Citigroup’s effective tax rate was 31.6% in the current quarter compared to 29.9% in the second quarter 2016

Citigroup’s operating expenses were up slightly at $10.5 billion in the second quarter 2017. In constant dollars, operating expenses increased by 2%, as higher volume-related expenses, performance-based compensation and ongoing investments were largely offset by efficiency saves and the wind-down of legacy assets.

Citigroup’s cost of credit in the second quarter 2017 was $1.7 billion, a 22% increase, driven by an increase in net credit losses of $94 million and a net loan loss reserve release of $16 million, compared to a net release of $256 million mostly related to legacy assets in the prior year period.

Citigroup’s allowance for loan losses was $12.0 billion at quarter end, or 1.88% of total loans, compared to $12.3 billion, or 1.96% of total loans, at the end of the prior year period. Total non-accrual assets declined 19% from the prior year period to $5.1 billion. Consumer non-accrual loans declined 23% to $2.8 billion and Corporate non-accrual loans decreased 15% to $2.1 billion.

Citigroup’s end of period loans were $645 billion as of quarter end, up 2% from the prior year period. In constant dollars, Citigroup’s end of period loans also grew 2%, as 4% growth in both GCB and ICG was partially offset by the continued wind down of legacy assets in Corporate / Other.

Citigroup’s deposits were $959 billion as of quarter end, up 2%. In constant dollars, Citigroup deposits were also up 2%, as a 3% increase in both GCB and ICG was slightly offset by a decline in Corporate / Other.

Citigroup’s book value per share was $77.36 and tangible book value per share was $67.32, each at quarter end, both representing a 6% increase. At quarter end, Citigroup’s Common Equity Tier 1 Capital ratio was 13.0%, up from 12.5% in the prior year period, driven primarily by earnings partially offset by capital return. Citigroup’s Supplementary Leverage Ratio for the second quarter 2017 was 7.2%, down from 7.5% in the prior year period, as an increase in Total Leverage Exposure more than offset an increase in Tier 1 Capital. During the second quarter 2017, Citigroup repurchased approximately 29 million common shares and returned a total of approximately $2.2 billion to common shareholders in the form of common share repurchases and dividends.

Re-disseminated by The Asian Banker