Citigroup Profit Falls 3 Percent, Hurt by Credit Costs

Citigroup earnings
(AP Photo/Mark Lennihan, File)

NEW YORK (AP) - Citigroup’s second-quarter profit fell 3 percent as the bank had to set aside more money to cover souring loans, especially in its creditcard business. Like its competitors, it also saw a drop in trading revenue caused by quieter markets.

The New York-based bank earned $3.87 billion, or $1.28 per share, compared with $3.99 billion, or $1.24 per share, in the same period a year earlier. The results still beat analysts’ forecasts of $1.21 a share, according to FactSet.

Like its rival JPMorgan Chase, Citigroup saw a sizable increase in interest income. The Federal Reserve has been steadily raising interest rates, which has allowed banks to charge more to borrow. Citi had net interest revenue of $11.17 billion, up 6 percent from a year earlier.

At the same time, Citi had to write off more bad loans in the quarter, mostly in credit cards. Citigroup has been expanding its credit-card business, like its rivals have.

Citi’s global consumer banking division earned $1.13 billion, down 12 percent from a year earlier.

The bank’s investment and trading operations had a better quarter. Citi’s institutional clients group earned $2.76 billion, up 6 percent from a year earlier. While trading revenues were down across the board, Citi saw a jump in fee income from advising companies in its investment bank.