Marking a second consecutive quarter of profit, Citigroup (C) earned $2.7bn this quarter, $0.09 per diluted share, totaling $7.1bn of net income in the first six months of 2010. Like Bank of America, Citi is reducing its mortgage exposures with Mortgage Servicing Rights down to $4.9bn this quarter from $6.4bn in Q110. Total real estate lending is also down to $23.1bn from $24.4bn last quarter, a year-on-year decrease of 12%. The bank originated $11.2bn in mortgages in the quarter, up from the last two quarters, but down substantially from a peak of $28.8bn in Q209. Citi’s third party mortgage servicing portfolio remains steady at $190.8bn. The bank earned $22.1bn in revenue in the quarter, down from the first quarter. Revenues declined $3.4bn and net income was down $1.7bn from the first quarter of 2010. The bank reports sequential revenue growth across all international regions although expenses are up, despite cost-cutting measures, owing mainly to the new tax in the UK on bank employee bonuses. “While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter,” said CEO Vikram Pandit. “We saw growth internationally, particularly in transaction services and consumer banking in Latin America and Asia.” Citi is the one of the largest originator of mortgages in the United States. In 2009, it held 4.5% of the market at $81bn, down from $115bn the year before when it held 7.7% market share. The bank reports a Tier 1 Capital Ratio of 12%, or $99.5bn, with $46.2bn pooled for loan losses. Credit losses declined for the fourth consecutive quarter at $8bn. Write to Jacob Gaffney. The author holds no relevant investments.
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