Bank of America, Citigroup post declines in profit

The banks beat expectations, but shares of both companies fall.

By Elizabeth Strott Jul 16, 2010 10:44AM

Bank of America (BAC) and Citigroup (C) were the latest financial companies to report second-quarter results today, but investors didn't like what they heard.

 

Bank of America said second-quarter net income fell 3% to $3.12 billion, or 28 cents per share before preferred dividends, from $3.22 billion, or 33 cents per share, in the same period a year earlier. Analysts had been looking for 22 cents per share.

 

Total revenue net of interest expense was $29.2 billion, down from $32.8 billion and missing expectations for $29.6 billion.

 

B of A shares were down 95 cents, or 6.2%, to $14.44.

 

The bank's provision for credit losses fell to $8.11 billion from $13.38 billion in the year-ago quarter. Net charge-offs rose to $9.56 billion from $8.7 billion.

 

Bank of America ended the second quarter with a 10.67% Tier 1 capital ratio, compared with 11.93% a year ago. B of A paid back the $45 billion in government loans in December.

 

Citigroup earned $2.7 billion, or 9 cents per share, down from $4.28 billion, or 49 cents per share, a year earlier. Analysts had expected a nickel per share.

 

Total revenue net of interest expense fell to $22.1 billion from $30 billion, missing expectations for $22.4 billion. The drop was due in part to a decline in revenue at the bank's Citi Holdings unit.

 

Fixed-income trading revenue slumped 31% to $3.7 billion from the first quarter, and stock-trading revenue tumbled 46% to $652 million. Investment-banking revenue fell 36% to $674 million.

 

Loan-loss provisions were $6.67 billion in the second quarter, down from $12.68 billion last year and $8.62 billion in the first quarter. Net credit losses fell to $7.96 billion from $11.47 billion last year and $8.38 billion in the previous quarter.

 

"While the market environment lowered revenues in securities and banking, credit improved for the fourth consecutive quarter," CEO Vikram Pandit said in a statement. "We continue to reduce the size of Citi Holdings, and it now makes up less than a quarter of Citigroup's balance sheet."

 

Citigroup shares were down 19 cents, or 4.6%, to $3.97.

5Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by:

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] Equity indices have spent the past 30 minutes in a slow climb towards their opening highs. The S&P 500 now trades about three points below its session high, while the Nasdaq hovers roughly 20 points below its best level of the session.

With the major averages fighting their way back from session lows, eight sectors now trade in the green, while two of the smallest groups-telecom services (-1.5%) and materials (-0.2%)-remain in negative territory.

On the ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Sponsored by:

VIDEO ON MSN MONEY