Citigroup (NYSE:C) declined in trading even as the bank reported better-than-expected Q2 results. The bank reported earnings of $1.52 per diluted share, marking a 14.3% year-over-year increase, which exceeded consensus estimates of $1.39 per share.
Citi’s Q2 Revenues Breakdown
The bank posted revenues of $20.1 billion, a 4% year-over-year increase that aligned with Street estimates. Citi’s net interest income rose by 10% year-over-year to $3.22 billion.
Revenue from equities trading surged 37% to $1.5 billion, driven by derivatives and hedge fund balances, surpassing analysts’ expectations by $300 million. Conversely, fixed income revenue decreased by 3% to $3.6 billion, meeting expectations.
Investment banking revenue soared 60% to $853 million, boosted by strong bond issuance and a rebound in IPO and merger activity.
Citi CEO Fraser Executes Strategy, Regulatory Risks Remain
Citi CEO Jane Fraser highlighted progress in executing the bank’s strategy. Last year, Fraser announced plans to reduce costs and simplify its management structure. Earlier this week, the Federal Reserve Board fined the bank $60.6 million for failing to address regulatory issues, including problems with data quality management and controls to manage ongoing risk.
Is Citibank a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about Citi stock, with a Moderate Buy consensus rating based on 10 Buys and eight Holds. Over the past year, Citi has increased by more than 40%, and the average Citi price target of $69.19 implies an upside potential of 5.9% from current levels. These analyst ratings are likely to change following Citi’s Q2 results today.
