U.S. News

Citigroup Second-Quarter Profit Rises 18% On Record Revenue

Reuters
WATCH LIVE

Citigroup, the largest U.S. bank, said second-quarter profit rose 18%, helped by record revenue growth, especially outside the United States, and tight cost controls.

The Citibank logo is shown on a branch office Wednesday, April 11, 2007 in New York. Citigroup Inc., which includes Citibank, announced Wednesday that it will eliminate about 17,000 jobs as part of a companywide restructuring to reduce costs and improve profits. (AP Photo/Mark Lennihan)
Mark Lennihan

Net income increased to $6.23 billion, or $1.24 per share, from $5.27 billion, or $1.05, a year earlier.

Revenue jumped 20% to $26.63 billion, while operating expenses were up 16%.

Analysts, on average, expected profit of $1.13 per share on revenue of $24.88 billion, according to Reuters Estimates.

Profit from international operations gained 35% to $3.04 billion, while revenue increased 34% to $12.56 billion.

The quarter included the early impact of a cost-cutting plan announced in April. It was designed to rid Citigroup of 17,000 jobs to help cut spending by $4.58 billion.

Chief Executive Charles Prince said the program is generating "improved efficiencies," as New York-based Citigroup continues to generate a greater portion of business from international operations.

Prince faces pressure from many shareholders to boost profit and revenue, and re-energize a long-lagging share price.

As at many other U.S. banks, Citigroup increased reserves for loan losses. Credit costs rose $934 million, Citigroup said, including an increase of $259 million in net credit losses and a $465 million charge to boost loss reserves.

Citigroup shares closed Thursday at $51.13 on the New York Stock Exchange. They have fallen 8% this year, compared with a 4% decline in the 24-member Philadelphia KBW Bank Index.