Citigroup Earnings Drop 37%, Revenues Also Slip

Citigroup (C) on Friday reported second quarter 2010 net income of $2.7 billion, or nine cents per share, on revenues of $22.1 billion, marking its second consecutive profitable quarter. Analysts estimated Citigroup would report earnings of five cents per share on $22.16 billion in revenue, according to First Call. Despite beating estimates, Citi shares slipped nearly 4% in morning trading.

Net income at the nation's third-largest bank declined 37% from last year's second quarter income of $4.3 billion, or 49 cents per share. Similarly, revenue fell 33% from $33.1 billion last year as securities and banking revenue tumbled 26%.

Fixed-income trading revenue declined 31% to $3.7 billion from the first quarter. Stock-trading revenue tumbled 46% to $652 million. Similarly, investment-banking revenue fell 36% to $674 million.

Citigroup also reported that net credit losses declined $422 million, or 5%, sequentially to $8.0 billion, reflecting improvement across most consumer portfolios. Net credit losses have declined for four consecutive quarters since reaching $11.5 billion in the second quarter of 2009, the bank said.

Provisions for credit losses and for benefits and claims declined $2.0 billion sequentially to $6.7 billion, the lowest level since the third quarter of 2007, the bank said.

Citigroup's Tier 1 Capital ratio was 12.0% compared to 11.3% in the prior quarter.

"I am pleased that we have produced solid operating results for the second consecutive quarter," Vikram Pandit, Citi CEO said in a statement. "While the market environment lowered revenues in Securities and Banking, credit improved for the fourth consecutive quarter. We saw growth internationally, particularly in Transaction Services and Regional Consumer Banking in Latin America and Asia. We continue to reduce the size of Citi Holdings, and it now makes up less than a quarter of Citigroup's balance sheet."