Summary
Citigroup Inc. reported a significant turnaround in the second quarter of 2009, posting a net income of $4.28 billion, or $0.49 per diluted share. This substantial improvement was largely driven by a $6.7 billion after-tax gain from the sale of its Smith Barney business as part of the joint venture with Morgan Stanley. Revenues surged by 71% year-over-year to $30 billion, benefiting from this gain and positive marks in Citi Holdings, though partially offset by declines in regional consumer banking, particularly in card portfolios. Operating expenses decreased by 21% due to re-engineering efforts and expense controls, and the company made progress on its capital structure. Notably, Citigroup completed significant exchange offers in July 2009, exchanging approximately $58 billion of preferred stock and trust preferred securities for common stock and interim securities. This transaction is expected to substantially increase its Tier 1 Common capital and Tangible Common Equity (TCE). Despite a continued challenging economic environment impacting credit quality, with provisions for credit losses rising significantly, the company demonstrated a notable recovery in profitability, driven by strategic divestitures and improved trading gains.
Financial Highlights
21 data points| Revenue | $29.97B |
| Operating Expenses | $12.00B |
| Operating Income | $6.13B |
| Interest Expense | $6.84B |
| Net Income | $4.28B |
| EPS (Basic) | $4.90 |
| EPS (Diluted) | $4.90 |
| Shares Outstanding (Basic) | 539.95M |
| Shares Outstanding (Diluted) | 596.78M |
Key Highlights
- 1Reported net income of $4.28 billion ($0.49/diluted share) for Q2 2009, a significant improvement from a loss in the prior year.
- 2Recorded a substantial $6.7 billion after-tax gain on the sale of Smith Barney as part of the joint venture with Morgan Stanley.
- 3Total revenues increased by 71% to $30 billion, primarily due to the Smith Barney gain and positive marks in Citi Holdings.
- 4Operating expenses decreased by 21% due to re-engineering and cost-control initiatives.
- 5Completed significant exchange offers in July 2009, exchanging $58 billion of preferred stock and trust preferred securities for common stock, bolstering capital ratios.
- 6Provisions for credit losses increased by 79% to $12.7 billion, reflecting ongoing economic challenges and deteriorating consumer credit quality.
- 7Maintained a strong liquidity position with total deposits of $804.7 billion and a Tier 1 Capital ratio of 12.74%.