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By Dhirendra Tripathi
Investing.com – Citigroup (NYSE:C) stock rose 2.3% Wednesday after its second quarter earnings and revenue topped estimates.
Net income at $6.2 billion was more than five times higher from a year-ago quarter’s $1.1 billion, aided by the release of loan loss reserves.
The bank's profits got a boost from the release $2.4 billion of loss reserves it had set aside to bulk up against any pandemic-related surprise. With the macro-environment improving, it no longer expects those shocks.
The bank reported earnings per share of $2.85 on revenue of $17.5 billion. Analysts had expected EPS of $1.99 on revenue of $17.36 billion.
While the bank did beat forecasts, revenue was lower by 12% from the same quarter a year ago as consumers cut back on spending, particularly on credit cards.
Average card loans were lower and so were the deposits as people, looking to utilize the stimulus checks, chose to repay loans. Global consumer banking revenues of $6.8 billion decreased 7%.
The bank is currently in the process of selling its consumer banking operations in 13 countries to focus on its higher-margin wealth management business.
Citigroup will exit consumer businesses in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. The bank’s institutional client business in those countries will not be affected.