Emerging markets bolster Citigroup result
Citigroup, the US's third-largest bank by assets, reported a profit of $US4.18 billion ($4.56 billion), compared with $US2.95 billion a year earlier. Revenue rose 11 per cent to $US20.48 billion.
"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," CEO Michael Corbat said.
Under his leadership, the bank hopes for growth to emerging markets, especially in Asia and Latin America. Citigroup is working to whittle down extraneous businesses that do not conform with its global operations, where its securities and lending operations dwarf those of many of its US rivals.
More than 50 per cent of Citigroup's revenue now comes from outside North America. Despite concerns about less-than-stellar growth in emerging markets, profit within Citigroup's international consumer banking business grew by 4 per cent to $US826 million. Revenue rose 5 per cent to $US4.7 billion.
Still, Citigroup's emerging markets business does not entirely inoculate the bank from broader challenges facing the US industry. On Friday, JPMorgan Chase and Wells Fargo reported falls in mortgage banking revenue, eroded by a lull in mortgage refinancing. A sharp rise in interest rates has caused the refinancing boom to sputter.
Frequently Asked Questions about this Article…
Citigroup reported a strong second quarter: net income rose 42% to US$4.18 billion (from US$2.95 billion a year earlier), and revenue increased 11% to US$20.48 billion.
Citigroup said its emerging markets business helped drive the quarter’s outperformance. CEO Michael Corbat highlighted balanced performance across products and geographies, with growth especially driven by emerging markets.
More than 50% of Citigroup’s revenue now comes from markets outside North America, reflecting the bank’s sizable international footprint.
Citigroup’s international consumer banking profit grew about 4% to US$826 million, while revenue in that business rose roughly 5% to US$4.7 billion.
Under CEO Michael Corbat, Citigroup is focusing on growth in emerging markets—particularly Asia and Latin America—while trimming businesses that don’t align with its global securities and lending operations.
Not entirely. The article notes that while emerging markets helped performance, Citigroup still faces broader industry headwinds in the US, such as weakness in mortgage banking revenue.
Banks including JPMorgan Chase and Wells Fargo have reported declines in mortgage banking revenue because a sharp rise in interest rates has cooled the refinancing boom, causing a lull in mortgage refinancing activity.
The article states Citigroup’s securities and lending businesses dwarf those of many US rivals, making them a central part of the bank’s global operations and competitive position.
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