Citigroup has posted a 42% increase in second-quarter profit that beat analysts’ estimates as stock-trading revenue surged and losses on unwanted assets declined.
Net income climbed to $4.18bn from $2.95bn.
Bloomberg News reports that Chief Executive Officer Michael Corbat, 53, has fired thousands of workers and scaled back operations in some countries to cut costs since replacing Vikram Pandit, 56, in October.
Citi Holdings, the unit created in 2009 as a home for the company’s unwanted assets after the financial crisis, posted its smallest loss ever.
'Citi has done a good job of de-risking its business by pulling out and cleaning up the Citi Holdings assets', said Marty Mosby, an analyst with Guggenheim Securities. 'The critical element for long-term value creation is still a continued lessening of the drag from Citi Holdings'.
Corbatt said: '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. We again consumed a modest amount of DTA, bringing the total utilized to about $1.3 billion for the first half of the year.
'We increased our already strong capital levels, reaching an estimated Basel III Tier 1 Common ratio of 10%. Generating consistent and quality earnings is a key priority and this quarter met that goal'.