10-QPeriod: Q2 FY2011

CITIGROUP INC Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 5, 2011For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported a net income of $3.3 billion, or $1.09 per diluted share, for the second quarter of 2011. This represents a 24% increase year-over-year, primarily driven by a significant decline in credit costs which more than offset lower revenues and increased operating expenses. Total revenues, net of interest expense, decreased by 7% to $20.6 billion, with net interest revenue down 13% due to declining loan balances and lower interest-earning assets. However, non-interest revenues increased by 4%, bolstered by realized gains on asset sales within Citi Holdings. Operating expenses rose by 9% year-over-year to $12.9 billion, with increases attributed to foreign exchange translation, higher legal costs, and investment spending, partially offset by productivity savings. Credit costs saw a substantial reduction, with total provisions for credit losses declining by 49% and net credit losses down 35%, largely due to improvements in consumer credit, particularly in North America Citi-branded cards and retail partner cards. The company's capital position remained strong, with a Tier 1 Capital ratio of 13.6% and a Tier 1 Common ratio of 11.6%.

Financial Highlights

36 data points
Beta

Revenue

$20.62B

Net Income

$3.34B

16.2% Net Margin

EPS (Diluted)

$1.09

Total Assets

$1.96T

Free Cash Flow

$2.96B

Financial Statements
Beta
Revenue$20.62B
Operating Expenses$12.94B
Operating Income$6.23B
Interest Expense$6.44B
Net Income$3.34B
EPS (Basic)$1.12
EPS (Diluted)$1.09
Shares Outstanding (Basic)2.91B
Shares Outstanding (Diluted)3.00B

Key Highlights

  • 1Net income of $3.3 billion, a 24% increase year-over-year, driven by lower credit costs.
  • 2Revenues, net of interest expense, decreased 7% to $20.6 billion.
  • 3Operating expenses increased 9% to $12.9 billion, impacted by FX translation and legal costs.
  • 4Provisions for credit losses and net credit losses decreased significantly (49% and 35% respectively).
  • 5Citicorp's net income declined 2% to $3.7 billion, with international operations contributing over 68% of net income.
  • 6Citi Holdings reported a reduced net loss of $218 million, an 82% improvement year-over-year.
  • 7Tier 1 Common ratio improved to 11.62% and Tier 1 Capital ratio to 13.55%.

Frequently Asked Questions

Citigroup reported a net income of $3.3 billion in Q2 2011, a 24% increase from $2.7 billion in Q2 2010. This improvement was primarily driven by a substantial reduction in credit losses, which more than offset a 7% decrease in total revenues to $20.6 billion.

Operating expenses increased by 9% year-over-year to $12.9 billion. Approximately one-third of this increase was due to foreign exchange translation effects, another third to higher legal and related costs, and the remaining third to net investment spending partially offset by productivity savings.

Citicorp's net income slightly decreased by 2% to $3.7 billion, despite a revenue decline of 1%. International operations were a key driver, accounting for over 68% of Citicorp's net income. Citi Holdings showed significant improvement, reducing its net loss by 82% year-over-year to $218 million, due to lower operating expenses, reduced credit losses, and a higher loan loss reserve release.

Citigroup's capital position strengthened. The Tier 1 Common ratio was 11.62% and the Tier 1 Capital ratio was 13.55% as of June 30, 2011, both exceeding the 'well capitalized' regulatory requirements.