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 segments and a $400M gain from the Visa B exchange.

• Expenses declined 2% year-over-year due to simplification and cost reductions, partially offset by transformation investments and $136M in civil money penalties.

• Transformation and simplification efforts advanced, including technology upgrades, application retirements, and platform consolidations.

• Completed exit from China consumer banking; continued wind-downs in Korea and Russia, and separation of Mexico consumer business for IPO.

Financial highlights

• Net income: $3.2B, up 10% year-over-year; EPS: $1.52, up from $1.33; ROTCE: 7.2%.

• Revenues: $20.1B, up 4% year-over-year, including a $400M gain from the Visa B exchange; up 3% excluding divestitures.

• Operating expenses: $13.4B, down 2% year-over-year.

• Cost of credit: $2.5B, up 36% year-over-year, mainly due to higher card net credit losses.

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

Outlook and guidance

• Full-year 2024 revenue guidance: $80–81B, with 4–5% medium-term revenue CAGR target.

• FY24 expenses expected at $53.5–53.8B (excluding FDIC special assessment and civil money penalties), likely at the higher end.

• Medium-term expense target of $51–$53B by 2026, with $1.5B in restructuring savings and $0.5–$1B from stranded cost reductions.

• ROTCE target of 11–12% over the medium term.

• Plan to repurchase ~$1B of common stock in Q3 2024; future repurchases to be assessed quarterly.