Citigroup's Profit Fell Amid Slowdown in Trading

Citigroup's Profit Fell Amid Slowdown in Trading

The New York City-based banking giant reported Q2 earnings per share (EPS) of $1.28, which was $0.07 better than the Wall Street consensus estimate of $1.21. Last month, Chief Financial Officer John Gerspach predicted trading revenue would be down by 12% to 13% from a year ago.

Citigroup Inc (NYSE:C) early Friday posted market-beating Q2 profit and revenues, despite a drop in operating income linked to higher expenses and taxes.

The bank's investment and trading operations had a better quarter. "We are clearly on course to increase both the return on capital and return of capital for our shareholders". The bank promptly said it will double its dividend and buy up to $15.6 billion in shares.

Bank stocks, which have rallied strongly in recent weeks, ran out of gas on Friday.

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Citigroup suffered a drop in revenues from both equities and fixed income trading in the second quarter, but a record performance in investment banking helped offset the fall. Non-interest costs rose 1 percent to $10.5 billion, compared with analysts' $10.2 billion estimate.

That helped the institutional clients group post a slight year-on-year rise in net profits, despite the trading declines. Citigroup's revenue from investment banking climbed faster than at JPMorgan, where it rose 14 percent.

In the consumer bank, led by Stephen Bird, revenue rose 5 percent to $8.04 billion.

Citi's global consumer banking division earned $1.13 billion, down 12 percent from a year earlier.