Hot Financial giant to watch: Citigroup Inc (NYSE: C)

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Citigroup Inc (NYSE: C) stock rose over 2.2% on July 16th, 2018 (As of  10:11 AM GMT-4; Source: Google finance). The bank has reported a 16 percent rise in the quarterly profit (in the second quarter of FY 18) as the Wall Street bank benefited from lower taxes, higher fee income and strength in its consumer banking business in Mexico. C, the third-largest U.S. bank by assets said net income rose to $4.49 billion in the second quarter ended June 30, from $3.87 billion a year earlier. Pretax profit from continuing operations rose 5 percent. However, the bank’s provision for income tax fell by $351 million, after President Donald Trump’s corporate tax rate cuts. Buybacks reduced the shares outstanding by 8 percent from a year earlier, further boosting earnings per share.

Citigroup in the second quarter of FY 18 has reported the adjusted earnings per share of $1.63 from $1.28, beating the analysts’ estimates for the adjusted earnings per share of $1.56, according to Thomson Reuters. The company had reported the adjusted revenue growth of 2 percent to $18.47 billion in the second quarter of FY 18, missing the analysts’ estimates for revenue of $18.51 billion.

Moreover, during the second quarter, Citigroup’s EBIT was up 5%, due to the revenue growth in both sides of the house, combined with continued expense and credit discipline. Loans and deposits increased 5% and 4%, respectively. The bank’s efficiency ratio was 58%, 130 basis points better than a year ago. Citigroup’s return on assets was 94 basis points, an 11 basis points higher than a year ago and the return on tangible common equity improved to 10.8%, which is 300 basis points higher than a year ago.

Additionally, Citigroup’s Global Consumer Banking had 3% revenue growth, including 6% internationally and Latin America revenue grew 11%. While underlying growth in Asia was 4%, in line with the company’s medium-term expectations. Further, Institutional Clients Group also grew revenues by 3%. The Fixed Income was in line with what the company had projected, the bank’s equities business had another strong quarter, up 19% from the year before and the accrual businesses continued to show strong growth across the board, especially Treasury and Trade Solutions, Security Services, Corporate Lending, and the Private Bank. Investment banking revenue delivered another strong quarter with good growth in advisory and equity underwriting.

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