Citigroup (NYSE:C) reported stronger-than-expected second-quarter results on Tuesday, with earnings and revenue both exceeding Wall Street forecasts as higher trading activity and a rebound in investment banking helped lift profit by 45%.
Despite the earnings beat, Citigroup shares were down 1.23% in premarket trading.
Earnings and Revenue Surpass Forecasts
Citigroup posted earnings of $3.15 per share for the second quarter, comfortably ahead of the analyst consensus estimate of $2.73.
Revenue climbed to $24.77 billion, marking the bank’s highest quarterly revenue in a decade and exceeding the market forecast of $23.66 billion.
The results reflected broad-based strength across the bank’s trading and investment banking operations.
Market Volatility Boosts Trading Activity
Increased market volatility linked to geopolitical tensions between the United States and Iran encouraged greater client trading activity across global financial markets.
The resulting swings in oil prices, interest rate expectations and other asset classes prompted investors to reposition portfolios, providing a significant boost to Citigroup’s trading businesses.
Equities trading revenue surged 45% year over year, while fixed-income markets revenue increased 7%.
Within fixed income, rates and foreign exchange trading rose 1%, while revenue from other fixed-income activities, including commodities, climbed 25%.
Investment Banking Rebounds
Citigroup also benefited from a recovery in corporate finance activity during the quarter.
Investment banking revenue jumped 44% to $1.55 billion, while total banking revenue increased 34% to $1.92 billion.
Corporate lending revenue declined during the period, partially offsetting gains elsewhere in the banking division.
The bank also participated in several high-profile transactions, serving as an underwriter for SpaceX’s $75 billion initial public offering and advising on major mergers and acquisitions, including the $44.8 billion combination of Unilever and McCormick’s food businesses.
Banking Sector Delivers Strong Quarter
Citigroup’s results were released alongside earnings from several of the largest U.S. banks, including JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC), all of which also reported higher quarterly profits.
The latest results highlight continued strength across the banking sector, with elevated market activity and stronger investment banking fees providing a significant earnings boost during the quarter.