Citigroup beats estimates despite 17% fall in profits

Investment banking giant Citigroup has reported a 17% fall in second-quarter profit on lower revenue from consumer banking; still beating analysts’ estimates as fixed-income trading rebounded and the firm dedicated less money to soured loans.

Net income dropped to $4bn from $4.85bn a year earlier, the company said yesterday. Chief executive Michael Corbat had predicted a roughly $3.5bn quarterly profit in early June.

Citigroup joins JPMorgan Chase in navigating the market turmoil set off by the UK’s shock decision to leave the EU.

Mr Corbat has spent years winnowing problem assets, overhauling controls and narrowing the firm’s focus to consumer markets with acceptable returns.

“These results demonstrate our ability to generate solid earnings in a challenging and volatile environment,” he said yesterday.

Revenue excluding accounting adjustments fell 8% to $17.5bn, while expenses declined 5% to $10.4bn. Both matched analysts’ estimates.

Mr Corbat’s earnings forecast at an investor conference also proved conservative for Citigroup’s investment bank.

He predicted total trading and investment-banking revenue would be “up slightly” compared with the first quarter. It rose 17%. From a year earlier, investment-banking revenue slipped 6% to $1.22bn, beating analysts’ estimates for $972m.

The bank, which gets more revenue from outside its home market than any of its US peers, felt some pain from the dollar’s strength during the period. Net income from consumer banking fell 18%.