Citigroup reported its second quarter earnings today, beating analyst expectations by losing far less money than anticipated.
The country’s largest bank lost $0.54 per share in the second quarter, beating most analyst expectations of roughly $0.66 per share. Of course, that compares to last year’s second-quarter earnings of $1.24 per share. Citigroup stock was up more than 8 percent in afternoon trading.
Revenues were $18.7 billion, down by 29 percent from $26.3 billion in the same period last year. The $2.5 billion quarterly loss included $7.2 billion in pre-tax write-downs, primarily from sub-prime and monoline insurer related exposures, as well as $4.5 billion in credit costs in consumer banking. “The solid results in the core franchise were offset” by these write-downs and credit costs, according to the press release.
Like Merrill Lynch, Citi is selling assets and reducing headcount to raise capital and reduce expenses. Headcount was reduced by 6,000 this quarter, bringing the total for the first half of 2008 to 11,000 and asset sales included CitiStreet, a global benefit provider and retirement plan record keeper, and the firm’s German retail banking operation.
Over in global wealth management, revenues were up 4 percent to $3.3 billion from $3.2 billion in the year ago quarter—thanks to growth in every region except the U.S. But the unit’s net income was down 21 percent to $405 million from last year’s quarter. The pre-tax profit margin for the business was 19 percent in the quarter, down from 23 percent last year.
Perhaps most shocking was the amount of assets fleeing the brokerage arm: “Net new client assets” were negative $11 billion this quarter. The number of financial advisors in the quarter was 14,983, down four percent from 15,595 last year.