Citigroup (C) posted net income for the second quarter 2015 of $4.8 billion, or $1.51 per diluted share, on revenue of $19.5 billion. This is compared to net income of $181 million, or $0.03 per diluted share, on revenue of $19.4 billion for the second quarter 2014.
CVA/DVA (credit valuation adjustment and debit valuation adjustment) was $312 million ($196 million after-tax) in the second quarter 2015, compared to negative $33 million (negative $20 million after-tax) in the prior year period.
Second-quarter 2014 results also included the impact of a $3.8 billion charge ($3.7 billion after-tax) to settle legacy residential mortgage-backed securities and CDO-related claims.
Excluding CVA/DVA, revenue was $19.2 billion, down 2% from the prior year period. Excluding CVA/DVA and the impact of the mortgage settlement in the prior year period, earnings were $1.45 per diluted share, up 17% from prior year earnings of $1.24 per diluted share.
With the exclusions, Seeking Alpha said the bank Citigroup’s EPS of $1.45 beat estimates by $0.11, while revenue of $19.15 billion beat by $40 million.
"Our results for the quarter show very balanced performance across our business lines. We grew loans and deposits in constant dollars in global consumer banking, while also gaining wallet share among target clients in our institutional clients group,” said Michael Corbat, CEO of Citigroup.
"Citi Holdings remained profitable and we again reduced its assets, having completed the sales of additional consumer businesses. As we increased our capital return, we still continued to grow our regulatory capital, raising our Common Equity Tier 1 Capital ratio to 11.4%. Through active expense and balance sheet discipline, we are on track to reach our financial targets for the year,” continued Corbat.
Operating expenses dropped to $10.9 billion in the second quarter 2015, 30% lower than in the prior year period. Excluding the impact of the mortgage settlement in the prior year period, operating expenses fell 7%, mainly driven by lower legal and related expenses and repositioning costs.
Operating expenses in 2Q15 included legal and related expenses of $360 million, compared to $402 million in the prior year period, and $61 million of repositioning charges, compared to $397 million in the prior year period.
Additionally, the bank’s allowance for loan losses fell to $14.1 billion at quarter end, or 2.25% of total loans, compared to $17.9 billion, or 2.70% of total loans, at the end of the prior year period.
Citigroup's loans were $632 billion as of quarter end, down 5% from the prior year period, and down 1% on a constant dollar basis. In constant dollars, 4% growth in Citicorp loans was more than offset by continued declines in Citi Holdings, driven primarily by reductions in the North America mortgage portfolio and the reclassification of loans to held-for-sale in connection with previously-announced agreements to sell OneMain Financial and Citi's retail banking and credit card businesses in Japan.