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Citigroup shares rise after bank reports better-than-expected earnings on strong trading results – CNBC

Citigroup reported second-quarter results that surpassed analyst expectations thanks in part to a massive surge in trading revenue.

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Citigroup reported on Tuesday second-quarter results that surpassed analyst expectations thanks in part to a massive surge in trading revenue that helped offset a slowdown in the company’s consumer banking business. 
Here’s how the company’s results compared to analyst estimates:

  • Earnings: 50 cents per share vs 28 cents per share expected by Refinitiv
  • Revenue: $19.77 billion vs $19.12 billion forecast
  • Fixed income, currency and commodities trading revenue: $5.6 billion vs $4.86 billion forecast by FactSet

The bank’s stock rose more than 1% in the premarket. 
Citigroup’s fixed income trading revenue represents a 68% year over-year surge and accounted for most of the company’s Markets and Securities Services revenues, which rose 48% to $6.9 billion.
Those elevated trading numbers come amid heightened market volatility during the coronavirus pandemic. They also come on the heels of massive monetary stimulus from the Federal Reserve. Equity trading revenue dipped 3% to $770 million, however. 
Citigroup’s global consumer banking division struggled during the second quarter, with revenues falling 10% to $7.34 billion on a year-over-year basis. Net credit losses, meanwhile, jumped 12% year over year to $2.2 billion. Ultimately, the company posted net income of $1.32 billion, which represents a 73% drop from the second quarter of 2019. 
“While credit costs weighed down our net income, our overall business performance was strong during the quarter, and we have been able to navigate the COVID-19 pandemic reasonably well. The Institutional Clients Group had an exceptional quarter, marked by an increase in Fixed Income of 68%,” CEO Michael Corbat said in a statement. 
“With a sharp emphasis on risk management, we are prepared for a variety of scenarios and will continue to operate our institution prudently given this unprecedented situation,” Corbat added.
Citigroup shares are up nearly 12% the last three months through Monday’s close, outperforming peers such as JPMorgan Chase, Wells Fargo and Bank of America. JPMorgan and Bank of America were roughly flat in that time and Wells lost 19.2%.
The bank announced in late June it would maintain its quarterly dividend after passing the Federal Reserve’s annual stress test. 
Citigroup’s results Tuesday come in what is expected to be the one of the worst earnings season on Wall Street. Analysts polled by Refinitiv expect S&P 500 earnings to have fallen by 44% on a year-over-year basis. 
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Business

China’s retail sales unexpectedly fall as consumer caution prevails – Fox Business

The reports raised concerns about the fragility of China’s emergence from coronavirus

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China’s retail sales slipped in July, dashing expectations for a modest rise, as consumers in the world’s second-largest economy failed to shake off wariness about the coronavirus, while the recovery in the factory sector struggled to gain momentum.
Asian markets pulled back on Friday following the disappointing set of economic indicators, which raised concerns about the fragility of China’s emergence from coronavirus.
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China’s recovery had been gath…

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Uber and Lyft Lose Bid to Keep Exploiting Their Drivers for Just a Little Bit Longer – Gizmodo

On Thursday, a California judge denied motions by Uber and Lyft to delay a previous injunction ordering the ridesharing companies to reclassify their contractors as full-time employees. That ruling goes into effect on August 20, to which the companies had req…

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On Thursday, a California judge denied motions by Uber and Lyft to delay a previous injunction ordering the ridesharing companies to reclassify their contractors as full-time employees. That ruling goes into effect on August 20, to which the companies had requested a 10-day extension in order to attempt an appeal.
I am confident that the court of appeal is capable of acting very quickly where it is necessary for it to do so. I am unconvinced that any extension of the 10 day stay is required. B…

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Asian markets muted as traders warily await U.S. stimulus deal – MarketWatch

Nikkei about flat, while stocks fall in Seoul

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Asian markets were little changed in early trading Friday, after stocks fell on Wall Street as the stalemate over a second coronavirus-aid plan continued to fester on Capitol Hill.Sony
6758,
+2.02%
gained in Tokyo trading while SoftBank
9984,
-1.51%
sank, while in Hong Kong, Wharf Real Estate
1997,
+2.16%
rose as HSBC
5,
-0.70%
and PetroChina
857,
fell. Samsung
005930,
-1.19%
declined in Seoul trading.
Asian stocks were muted as U.S. lawmakers political grandst…

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