Citigroup Reports Second Quarter 2018 Financial Results

NEW YORK--(BUSINESS WIRE)--Jul 13, 2018--Citigroup Inc. (NYSE: C)

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EARNINGS PER SHARE OF $1.63

NET INCOME OF $4.5 BILLION

REVENUES OF $18.5 BILLION

RETURNED $3.1 BILLION OF CAPITAL TO COMMON SHAREHOLDERS

REPURCHASED 33 MILLION COMMON SHARES

BOOK VALUE PER SHARE OF $71.95 TANGIBLE BOOK VALUE PER SHARE OF $61.29 5

Citigroup Inc. today reported net income for the second quarter 2018 of $4.5 billion, or $1.63 per diluted share, on revenues of $18.5 billion. This compared to net income of $3.9 billion, or $1.28 per diluted share, on revenues of $18.2 billion for the second quarter 2017.

Revenues increased 2% from the prior-year period, driven by growth in both the Institutional Clients Group (ICG) and Global Consumer Banking (GCB), partially offset by lower revenues in Corporate / Other due to the continued wind-down of legacy assets. Net income of $4.5 billion increased 16%, driven by the higher revenues and a lower effective tax rate, partially offset by higher cost of credit. Earnings per share of $1.63 increased 27% from $1.28 per diluted share in the prior-year period, driven by the growth in net income and an 8% reduction in average diluted shares outstanding.

Citi CEO Michael Corbat said, “These results demonstrate good momentum across our franchise and that we are firmly on track to achieve the financial targets we introduced last year at Investor Day.

“During the quarter, we drove strong year-over-year revenue growth in many of our businesses – including our International Consumer franchise, Treasury and Trade Solutions, Equities, and the Private Bank. And we continue to support our clients as evidenced by solid loan growth that was balanced across businesses and geographies. Our focus on expenses has given us the ability to self-fund many of our investments and resulted in an improvement in our efficiency ratio for both the second quarter and through the first half of this year.

“Finally, we were pleased to receive a non-objection from the Federal Reserve to our capital plan submitted as part of the 2018 CCAR cycle which will allow us to return $22 billion in capital to common shareholders over the next year, marking another significant step towards delivering on our commitment to return at least $60 billion in capital over a three-year period,” Mr. Corbat concluded.

Percentage comparisons throughout this press release are calculated for the second quarter 2018 versus the second quarter 2017, unless otherwise specified.

Citigroup

Citigroup revenues of $18.5 billion in the second quarter 2018 increased 2%, driven by 3% aggregate growth in GCB and ICG, partially offset by a 20% decrease in Corporate / Other due to the continued wind-down of legacy assets .

Citigroup’s operating expenses of $10.7 billion in the second quarter 2018 were largely unchanged, as higher volume-related expenses and investments were offset by efficiency savings and the wind-down of legacy assets.

Citigroup’s cost of credit in the second quarter 2018 was $1.8 billion, a 6% increase, primarily driven by volume growth and seasoning in GCB.

Citigroup’s net income increased to $4.5 billion in the second quarter 2018, primarily driven by the higher revenues and a lower effective tax rate, which more than offset the higher cost of credit, as expenses remained largely unchanged. Citigroup’s effective tax rate was 24% in the current quarter compared to 32% in the second quarter 2017.

Citigroup’s allowance for loan losses was $12.1 billion at quarter end, or 1.81% of total loans, compared to $12.0 billion, or 1.88% of total loans, at the end of the prior-year period. Total non-accrual assets declined 20% from the prior-year period to $4.1 billion. Consumer non-accrual loans declined 16% to $2.4 billion and corporate non-accrual loans decreased 23% to $1.6 billion .

Citigroup’s end of period loans were $671 billion as of quarter end, up 4% from the prior-year period. Excluding the impact of foreign exchange translation 6, Citigroup’s end of period loans grew 5%, as 6% aggregate growth in ICG and GCB was partially offset by the continued wind-down of legacy assets in Corporate / Other.

Citigroup’s end of period deposits were $997 billion as of quarter end, an increase of 4% from the prior-year period on both a reported and a constant dollar basis. The increase in constant dollars was driven by 9% growth in ICG, as GCB remained largely unchanged.

Citigroup’s book value per share of $71.95 and tangible book value per share of $61.29, both as of quarter end, were largely unchanged sequentially, as the benefit of a lower share count was offset by the aggregate impact to common equity of net income, share repurchases and dividends, as well as currency translation. At quarter end, Citigroup’s CET1 Capital ratio was 12.1%, unchanged sequentially, as net income was largely offset by the return of capital to common shareholders. Citigroup’s SLR for the second quarter 2018 was 6.6%, down slightly from 6.7% sequentially. During the second quarter 2018, Citigroup repurchased 33 million common shares and returned a total of $3.1 billion to common shareholders in the form of common share repurchases and dividends.

Global Consumer Banking

GCB revenues of $8.3 billion increased 2%, driven by growth across all regions. In constant dollars, revenues increased 3%.

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