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Citigroup Posts Profit in Q2

Jul 15, 2013

"Our businesses performed well during the quarter and these results are well-balanced through our products and geographies, especially in the emerging markets, where growth is being challenged. We also continued to make progress in several critical areas. We reduced the earnings drag caused by Citi Holdings, where we saw the largest percentage reduction of assets since 2010,” said Michael Corbat, CEO of Citi. “We increased our already strong capital levels, reaching an estimated Basel III Tier 1 Common ratio of 10 percent. Generating consistent and quality earnings is a key priority and this quarter met that goal." With a net income of over $4 billion, Citigroup’s numbers were clearly up from 2012’s second-quarter figures. In 2012, Citigroup posted a $2.9 billion net income. Shares also increased at a rate of 25 percent to $1.25 per share. Overall, Citigroup saw an 11 percent increase overall in yearly earnings compared to 2012, with second-quarter earnings up eight percent alone. Positive news for Citigroup doesn’t particularly surprise anyone in the industry, with Wayne Kaufman, chief market analyst at Rockwell Securities in New York telling Reuters. "There aren't many sellers in the market, but there's a sense that with earnings coming up, everyone is lined up waiting for the gun to go off. Retail sales were disappointing, but Citigroup had good news. But that news was largely expected." Overall, Citigroup’s numbers are up around 42 percent from last year. While Citigroup is posting positive results, growth is a bit slower than anticipated, with some indicating that slow growth in Mexico attributing to the actual figures being lower than projected estimates. "We certainly adjusted expectations down" Citigroup CFO John Gerspach told the Wall Street Journal, regarding growth in emerging markets. Citigroup has been actively seeking heavy growth in emerging markets, but might soon find itself hedging its bets and switching strategies, should continue growth be as minimal as the second-quarter’s. Jamie Dimon, CEO of JPMorgan Chase stated, “Our folks in emerging markets did a particularly good job, which might not be the same for some others reporting,” a light dig at Citigroup.
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