Sunday, July 22, 2012

Citigroup Earnings Review: Relatively Stable Performance

Citigroup reported QE June 2012 financial results on Monday, July 16

Citigroup beat the projected $0.89 EPS with a decent $0.95, which was a flat 0% QoQ and -13% YoY. CEO Vikram Pandit reported relatively stable results overall: not too disappointing but not very encouraging either. The long-term trend, the earnings per share year-over-year, has decreased 3 consecutive quarters and 4 of the past 6 quarters. This is about all that can be hoped for in this financial institution debacle. Citigroup is in the Trillion Dollar Assets Club with JPMorgan, Bank of America, and Wells Fargo.

Metric, QoQ Change, YoY Change
Total Assets: $1.92 trillion, -1%, -2%
Net Revenues: $18.64 billion, -4%, -10%
Net Income: $2.95 billion, +1%, -12%
Earnings per Share: $0.95, 0%, -13%

At QE 6-30-12, I have rated Citigroup an "D-" on a scale of A+ to G-. This is no change in the rating from the prior QE 3-31-12. The median rating is "D" and the average rating at QE 3-31-12 was "C". Financial position is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.

Vikram Pandit, Citi’s Chief Executive Officer, said, “Our core businesses performed well in a difficult environment and are generating solid returns. We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services. We reduced Citi Holdings to approximately 10% of our balance sheet while our capital strength and liquidity continue to be among the best in the industry. We remain focused on execution, managing our expenses and our risk, and serving clients as only we can.”


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