Citigroup reported net income for the second quarter 2023 of $2.9 billion, or $1.33 per diluted share, on revenues of $19.4 billion. This compares to net income of $4.5 billion, or $2.19 per diluted share, on revenues of $19.6 billion for the second quarter 2022.
Second quarter results included divestiture-related impacts of $(73) million5 in earnings before taxes ($(92) million after-tax), primarily driven by separation costs related to Mexico and severance costs in Asia exit markets, which were both recorded in Legacy Franchises. Excluding these divestiture-related impacts, earnings per share was $1.375. This compares to divestiture-related impacts in the second quarter 2022 of $48 million5 in earnings before taxes ($35 million after-tax), also recorded in Legacy Franchises, and earnings per share in the second quarter of 2022, excluding divestiture-related impacts, of $2.175.
Revenues decreased 1% from the prior-year period, as growth in Services in Institutional Clients Group (ICG) and US Personal Banking within Personal Banking and Wealth Management (PBWM) was more than offset by a decline in Markets and Investment Banking in ICG and Global Wealth Management in PBWM, as well as the revenue reduction from exited markets and wind-downs within Legacy Franchises. The decline in revenues was also partially offset by higher revenues in Corporate / Other.
Net income of $2.9 billion decreased 36% from the prior-year period. Excluding divestiture-related impacts5, net income decreased 33%. The decrease in net income was primarily driven by higher expenses, higher cost of credit and the lower revenues.
Earnings per share of $1.33 decreased 39% from the prior-year period, reflecting the lower net income and an approximate 1% increase in average diluted shares outstanding.
Citi CEO Jane Fraser said, “Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet. Our Services businesses continued to deliver strong revenues, with Treasury and Trade Solutions and Securities Services both up a healthy 15%. Markets revenues were down from a strong second quarter last year, as clients stood on the sidelines starting in April while the U.S. debt limit played out. In Banking, the long-awaited rebound in Investment Banking has yet to materialize, making for a disappointing quarter.”
“Our Cards businesses had double-digit growth due to strong engagement and continued normalization in payment rates. And while Wealth revenues were down, we are attracting new clients and seeing growth in segments such as Wealth at Work.”
“We remain laser-focused on executing our strategy while continuing to simplify and modernize our bank. We are on track with the plan we laid out at Investor Day and remain committed to reaching our medium-term return targets. We ended the second quarter with a CET 1 ratio of 13.3%, which was 100 basis points above our new regulatory requirement that goes into effect in the fourth quarter. We returned a total of $2 billion in capital to our shareholders through common dividends and share buybacks and we will continue to review our level of capital return on a quarter-to-quarter basis,” Ms. Fraser concluded.
Percentage comparisons throughout this press release are calculated for the second quarter 2023 versus the second quarter 2022, unless otherwise specified.
