Citigroup reports 2nd quarter earnings that beat revenue and profit expectations on strong trading (C)

Still, net income took a hit, driven by a substantially higher allowance for credit loss reserves due to the pandemic recession.
Shares of the bank jumped as much as 2% in early trading Tuesday.
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Citigroup reported second quarter earnings on Tuesday that beat analyst expectations for revenue and profit, offsetting a slowdown in the consumer banking division.

Revenue increased 5% from a year ago, reflecting higher revenues in fixed income markets and investment banking. Net income was 73% lower on the year, driven by a substantially higher allowance for credit loss reserves due to the pandemic recession.

Shares of Citigroup jumped nearly 2% in early trading Tuesday.

Here are the key numbers versus what analysts surveyed by Bloomberg expected:

Revenue: $19.8 billion reported versus $19.2 billion (expected)
Adjusted earnings per share: 50 cents per share versus 38 cents (expected)
Net income: $1.3 billion reported, down 73% from the previous year

"While credit costs weighed down our net income, our overall business performance was strong during the quarter, and we have been able to navigate the COVID-19 pandemic reasonably well," said , Citi CEO, in a statement.

Citi's Institutional Clients Group drove the quarterly performance, with a 68% jump in fixed income. That offset declining Global Consumer Banking revenues that took a hit as spending slowed due to the coronavirus pandemic.

Citigroup's allowance for credit losses on loans was $26.4 billion at the end of the quarter, or 3.89% of total loans, compared to $12.5 billion, or 1.82% of total loans, a year ago.

The earnings results show the impact of the sweeping nationwide shutdowns that began in mid-March to contain the spread of coronavirus, as well as the gradual reopening of the economy. By the start of June, all 50 states had relaxed at least some of their coronavirus restrictions, until spiking case numbers later in the month forced some to roll back or pause reopening plans.

The results come after Citigroup's first quarter results already showed the earliest signs of damage from the pandemic while profits increased, net income shrank 46% as the bank boosted its loan reserves in anticipation that a worsening economy would increase consumer defaults on bills including credit cards.

JPMorgan Chase on Tuesday reported second quarter earnings that beat analysts' revenue and profit forecasts as investment banking revenue surged 91% . Wells Fargo also released quarterly earnings on Tuesday. Goldman Sachs is set to release its second quarter results Wednesday.

This is a breaking news story. Check back for updates.

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