July 17, 2011- As Citigroup’s loan loss provisions declined from last year their profit soared by 24% in the second quarter, but without the help of those declining provisions the bank had to struggle in many of their businesses throughout the world.
Citigroup reported an overall profit of $3.3 billion. The company’s core division that they want to grow – profit and revenue – fell while expenses increased. Revenue increased as well as investment banking in Asia and Latin America but the profits from those regions fell.
Since their earnings were higher than analysts estimations their stock was up on Friday. Citigroup returned to profitability in 2010 after struggling like many others during the recession, but recently they have fallen behind their rivals and an increase in expenses in the first quarter both concerned and surprised their investors.
The second quarter saw costs increase by 9% to just over $13 billion while their overall revenue dropped 7% to $21 billion. Per share profits were $1.09 while most analysts had them at 96 cents a share.
The group benefited greatly from the lowering of bad debt provisions. Their provisions in the second quarter were $3.4 billion down from a year ago when they were at $6.7 billion.