Citigroup (C) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $3.2B ($1.52 EPS), up 10% year-over-year, driven by higher revenues and lower expenses, partially offset by higher credit costs.

• Revenues rose 4% year-over-year to $20.1B, with growth in all core businesses and a $400M gain from the Visa B exchange.

• Expenses declined 2% year-over-year, reflecting organizational simplification, cost reductions, and lower repositioning costs, partially offset by transformation investments and $136M in civil money penalties.

• Transformation and simplification initiatives advanced, including technology upgrades, application retirements, and exits from China consumer banking.

• Regulatory actions resulted in $136M in civil money penalties and a new Resource Review Plan with the OCC, but did not restrict common dividends or share buybacks.

Financial highlights

• Total revenues: $20.1B, up 4% year-over-year, including a $400M gain from the Visa B exchange offer; net income: $3.2B, up 10% year-over-year.

• Operating expenses: $13.4B, down 2% year-over-year; cost of credit: $2.5B, up 36% year-over-year, mainly from higher card net credit losses.

• CET1 capital ratio: 13.6%, up from 13.4% prior year, with regulatory requirement expected to decrease to 12.1% in October 2024.

• Tangible book value per share: $87.53, up 3% year-over-year; book value per share: $99.70.

• Efficiency ratio improved to 66% (down 350 bps year-over-year).

Outlook and guidance

• Medium-term targets reaffirmed, including 11%-12% ROTCE and 4–5% revenue CAGR.

• Expense guidance for 2024 remains $53.5–$53.8B, excluding FDIC special assessment and civil money penalties.

• NII expected to be modestly down for the year; branded cards NCL rate expected at 3.50–4.00%, retail services at 5.75–6.25%.

• CET1 regulatory requirement to decrease to 12.1% in October 2024; $1B buyback planned for Q3.

• Transformation and regulatory remediation to continue, with significant investments expected through 2025.