July 15 - Citigroup reports stronger-than-expected rise in adjusted quarterly profit, helped by big gains in securities and banking. Fred Katayama reports.
Getting rid of more of its bad assets helped pump up Citigroup's adjusted profit 26 percent in the second quarter. Its profit of $3.9 billion easily beating estimates. Its Citi Holdings unit shrank its unwanted assets 31 percent as well as its net loss. Also helping boost earnings: a 25 percent increase in its securities trading business. And Citi managed to lessen its net credit losses. CEO Michael Corbat, who has been busy cutting costs and laying off employees, said, "Our businesses performed well during the quarter and these results are well-balanced through our products and geographies, especially in the emerging markets, where growth is being challenged." Citi is known for its international reach, operating in more than 160 countries. In Asia, Its net income rose 10 percent and in Latin America, 9 percent. Citi's stock is one of the banking industry's best performers, nearly doubling over the last 12 months. It is up 28 percent this year. UBS analyst Brennan Hawken called the results "solid," and said, "We believe as Citi works through Holdings it will reduce the earnings headwinds and increase confidence. Over a longer time horizon, we expect the freeing up of capital can add further upside." Citi's double digit earnings growth mirrors that of the other big banks such as JPMorgan and Wells Fargo. Bank of America reports on Wednesday.