Citigroup’s profits in the second quarter comfortably beat market estimates in part due to significantly reduced loan provisions driven by an outperforming global economic recovery.
Citi posted $6.19 billion in net income for the second quarter, according to its latest results, marking a nearly six-fold increase compared to last year.
Profits in the quarter exceeded the average analyst expectation of $4.26 billion, according to Refinitiv IBES data, though revenues fell 12 percent year-on-year to $17.5 billion.
This was due in no small part to a $2.4 billion reduction in loan reserves for losses that did not occur. Last year, the bank added $5.9 billion to its loan reserves.
By segment, the global consumer bank saw revenues shrink 7 percent due to decreased lending through cards resulting in $1.83 billion in income.
The institutional business saw revenues fall 14 percent to $10.4 billion which led to $3.8 billion of income.
Corporate and other divisions posted $532 million of income from $267 million of revenue, an 8 percent decrease.
Within Asia, the consumer bank generated $171 million of income from $1.57 billion of net revenue.
The investment bank posted $823 million of income from $2.24 billion of revenue.
The pace of the global recovery is exceeding earlier expectations and with it, consumer and corporate confidence is rising, said Citi’s chief executive Jane Fraser in a statement.