Citigroup has reported a net income of $2.69bn for the second quarter of 2010, a decrease of 37% compared with $4.27bn for the same quarter in 2009.
The fall in net income reflected Citigroup’s sale of its majority stake in the Smith Barney brokerage to Morgan Stanley in 2009, which had earlier inflated its earnings at the time.
Revenues declined $3.4bn, largely as a result of lower Securities and Banking and Special Asset Pool revenues.
Other core businesses showed consistent strength, including Transaction Services with $929m in net income and sequential revenue growth across all international regions.
Provisions for credit losses and for benefits and claims declined $2bn sequentially to $6.7bn, the lowest level since the third quarter of 2007, reflecting continued improvement in credit quality. This helped increase Regional Consumer Banking’s net income by 16% sequentially to $1.2bn.
Vikram Pandit, CEO of Citi, said: “While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter. We saw growth internationally, particularly in transaction services and regional consumer banking in Latin America and Asia. We continue to reduce the size of Citi Holdings, and it now makes up less than a quarter of Citigroup’s balance sheet.
“Although economic conditions remain challenging and global regulatory frameworks are uncertain, we believe these results demonstrate that the difficult decisions made by our management team have put in place all the elements for sustained profitability.”