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Citigroup profit beats estimates on fixed-income rebound
[NEW YORK] Citigroup Inc's second-quarter profit fell 17 per cent on lower revenue from consumer banking, beating analysts' estimates as fixed-income trading rebounded and the firm set aside less money for soured loans.
Net income dropped to US$4 billion, or US$1.24 a share, from US$4.85 billion, or US$1.51, a year earlier, the company said Friday in a statement. Chief Executive Officer Michael Corbat had predicted a roughly US$3.5 billion quarterly profit in early June. Twenty-seven analysts surveyed by Bloomberg projected earnings- per-share of US$1.10 - in line with his forecast.
Citigroup joins JPMorgan Chase & Co, which reported results Thursday, in navigating the market turmoil set off by the UK's shock decision on June 23 to leave the European Union. Corbat, 56, has spent years winnowing problem assets, overhauling controls and narrowing the firm's focus to consumer markets with acceptable returns.
"There was some increased volatility around Brexit that I think we were probably positioned for, and importantly, with all that volatility, customers came to us seeking solutions for their issues," Chief Financial Officer John Gerspach said on a call with journalists. "Through that we did generate some sizable revenues." Revenue excluding accounting adjustments fell 8 per cent to US$17.5 billion, while expenses declined 5 per cent to US$10.4 billion. Both matched analysts' estimates. Shares of the company, which are down 14 per cent this year, rose 0.7 per cent to US$44.77 at 9.59 am in New York.