C US --> +2.64%
Citigroup beats by $0.10, beats on revs
Reports Q2 (Jun) earnings of $1.45 per share, excluding CVA/DVA gain of $0.06, $0.10 better than the Capital IQ Consensus Estimate of $1.35; revenues rose 0.2% year/year to $19.47 bln vs the $19.17 bln consensus.
- Citigroup revenues were $19.5 billion in Q2, approximately unchanged from the prior year period. Excluding CVA/DVA, revenues of $19.2 billion decreased 2% from the prior year period, as Citicorp revenues were approximately unchanged and Citi Holdings revenues decreased 16%. Excluding CVA/DVA and the impact of foreign exchange translation, Citigroup revenues increased 3% from the prior year period, as 5% growth in Citicorp revenues was partially offset by the decrease in Citi Holdings revenues.
- Citi Holdings revenues declined due to continued wind-down of the portfolio as well as the impact of classifying OneMain Financial as held-for-sale at the end of the first quarter 2015. As a result of the held-for-sale accounting treatment, approximately $160 million of net credit losses were recorded as a reduction in revenue during the second quarter 2015.
- Citigroup's operating expenses were $10.9 billion in the second quarter 2015, 30% lower than in the prior year period. Excluding the impact of the mortgage settlement in the prior year period, operating expenses fell 7%. In constant dollars, operating expenses fell 1%, mainly driven by lower legal and related expenses and repositioning costs. Operating expenses in the second quarter 2015 included legal and related expenses of $360 million, compared to $402 million in the prior year period, and $61 million of repositioning charges, compared to $397 million in the prior year period.
- Citigroup's book value per share was $68.27 and tangible book value per share was $59.18. Citigroup's Common Equity Tier 1 Capital ratio was 11.4%; Supplementary Leverage Ratio was 6.7%.
- GCB revenues of $8.5 billion decreased 4% from the prior year period, due to a 10% decline in international GCB revenues. On a constant dollar basis, revenues increased 1%, driven by growth in North America and Latin America GCB. GCB net income rose 4% from the prior year period to $1.6 billion, as lower expenses were partially offset by lower revenues and higher credit costs.
- Banking revenues of $4.4 billion were largely unchanged from the prior year period (excluding gain / (loss) on loan hedges in each period).
- Treasury and Trade Solutions (TTS) revenues of $2.0 billion decreased 1% versus the prior year period. On a constant dollar basis, TTS revenues grew 5%, as continued growth in deposit balances and spreads was partially offset by lower trade revenues.
- Investment Banking revenues of $1.3 billion decreased 4% versus the prior year period, as a 34% increase in advisory revenues to $258 million partially offset a 3% decrease in debt underwriting revenues to $729 million and a 25% decrease in equity underwriting revenues to $296 million.