Citigroup’s Profit Down 12%, but Beats Estimates

BY NELSON D. SCHWARTZ

Despite a 10 percent drop in revenue, Citigroup on Monday reported better than expected profit for the second quarter, buoyed by strength in its capital markets businesses.

The bank reported earnings of $2.9 billion, or 95 cents a share, although revenue fell to $18.6 billion. Those earnings include a $219 million gain related to how certain debt of the company is valued, as well as a one-time loss of $424 million on the sale of a stake in Akbank T.A.S., a Turkish bank.

Still, as with other financial giants, Citigroup has been facing pressure from new regulations that crimp earnings even as the anemic economy keeps loan growth stagnant. The company’s second-quarter profit was down 12 percent from the $3.3 billion the bank earned in the period a year earlier.Excluding one-time charges, Citi reported earnings of $1 a share on revenue of $18.8 billion. Analysts had been expecting adjusted earnings of 89 cents a share on revenue of $18.9 billion.

The company said it had record revenue in Transaction Services, which processes payments and provides other services to customers.

In its Citicorp unit, Latin America and Asia were sources of strength in the bank’s consumer areas. The company said it had strong growth in corporate loans, and did well in Latin American and North American consumer loans. At Citicorp, consumer loans increased 2 percent, to $284 billion, and corporate loans grew 22 percent, to $243 billion.

“We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses,” Vikram S. Pandit, Citigroup’s chief executive, said in the earnings release.