Jul 14, 2021 (Baystreet.ca via COMTEX) -- Citigroup Inc. /zigman2/quotes/207741460/composite C +0.22% comfortably beat market estimates for second-quarter profit on Wednesday as the economic recovery allowed the bank to release loan loss reserves and offset a plunge in revenue from lower trading and credit card lending.
For the quarter ended June 30, net income jumped to $6.19 billion, or $2.85 per share, from $1.06 billion, or 38 cents per share, a year earlier. Analysts on average had expected a profit of $1.96 per share.
The bank's profits were buoyed by its decision to take down $2.4 billion of loss reserves it had built during the pandemic for expected losses that have not materialized. A year ago, it had added $5.9 billion to its loss reserves.
Revenue plunged 12%, loans were down 3% and expenses rose 7%.
Jane Fraser, who became CEO earlier this year, is trying to turn around Citigroup, which has been crippled for years by poor risk and control systems.
The 7% rise in expenses was led by spending to improve those systems to comply with demands from regulators. The size of the increase suggested that the bank might miss its estimate from April that expenses for the full-year would increase only 2% to 3%.
Expenses are a particular concern for Citigroup investors as the bank has been unable to say how much money and time it will take to meet the requirements of regulators and fix its systems.
Shares in C jumped $1.68, or 2.5%, to $70.05
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