News Column

Long arm of law hits Citi earnings

July 14, 2014

By John Waggoner, @johnwaggoner, USA TODAY

Citigroup reported second-quarter earnings of 3 cents per share Monday, as it agreed to a massive $7 billion settlement with the Justice Department. Excluding the settlement and other charges, Citi's earnings would have been $1.24 per share.

Analysts were expecting $1.05 per share, excluding special charges. Citi shares closed at $48.42, up 3%.

Even excluding the settlement and other charges, Citi's earnings still declined from the second quarter of 2013, when the company earned $1.34 per share. Revenue fell 6% to $19.3 billion in the second quarter from $20.5 billion a year earlier.

The company took a charge of $3.8 billion before taxes in the second quarter because of the settlement with the Justice Department for its role in making and packaging toxic mortgage securities in the runup to the 2007-2009 financial crisis.

"Our businesses showed resilience in the face of an uneven economic environment," Citi CEO Michael Corbat said in a statement. "During the quarter, we continued to grow loans in our core businesses, reduce operating expenses by simplifying our products and processes and utilize our deferred tax assets."

Corbat also said that the company managed to improve its financial strength, despite the settlement with the Justice Department.

Citi's trading revenue fell 16% in the second quarter from the previous year. Analysts had expected a decline in trading revenue.

The company grew its core business -- lending -- by 8% from the previous year. Citicorp loans grew $585 billion, with 9% growth in corporate loans to $283 billion and 7% growth in consumer loans to $303 billion.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: USA Today

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters