Citigroup tops profit estimates on trading bounce
Citigroup beat analysts’ estimates for profit in the second quarter as its trading desks cashed in on the market volatility caused by the coronavirus outbreak.
The uptick allowed it to set aside $5.6bn for a potential surge in loan defaults.
The New York-based bank reported a profit of $1.32bn for the three months to the end of June, down from $4.8bn a year earlier.
Revenue rose five per cent to $19.77bn, slightly above average analyst estimates of $19.12bn, according to Refinitiv data.
Trading fees, a bright spot for many banks as markets remain volatile during the pandemic, helped offset low interest rates, with bond trading revenues up 68 per cent.
However its shares fell more than two per cent as markets opened on Wall Street this afternoon.
The largest US banks have so far stashed away more than $52bn to prepare for potential losses this year, as the country’s economy heads into one of its worst recessions in decades.
So far Citi, the third largest credit card issuer in the US, has offered forbearance on 2m credit card accounts representing six per cent of balances, the bank said.
Total loans fell marginally to $685bn.
Net interest income, or the difference between what a bank pays for deposits and earns from loans, was down seven per cent.