Citibank (C.US)'s stock trading revenue set a record but still lags behind its peers. The Q2 performance overall exceeded expectations

The Zhitong Finance App learned that Citigroup's (C.US) stock trading business hit a new high in revenue, driving many of the company's core business lines to outperform Wall Street expectations. According to financial reports, Citi's second-quarter revenue was $24.8 billion, exceeding the market's general forecast of $23.7 billion; earnings per share were $3.15, higher than analysts' average estimate of $2.73.

Citi's second-quarter stock trading revenue increased 45% year over year to US$2.3 billion, which is about 11% higher than the record set in the first quarter of this year. The bank is trying to attract more hedge funds to expand this business landscape. Currently, its scale is still smaller than the same type of business of Wall Street rivals.

The major bank's net interest income in Q2 was US$171 billion, exceeding the market's general expectation of US$16 billion, up 9% month-on-month and 13% year-over-year.

Credit loss provisions for the second quarter fell from $2.81 billion in the previous quarter and $2.87 billion in the same period last year to $2.52 billion, lower than analysts' average expectations of $2.73 billion.

According to financial reports released on Tuesday, four of the company's five main divisions — banking, services, markets, and wealth — all surpassed analysts' expectations. Earnings per share of $3.15 were better than all 20 analysts' estimates.

In line with other major banks, the Citibank division's revenue for the current period hit the highest since 2021 — when the turbulent pandemic ratio bottomed out, triggering a boom in transactions across the industry. Since Vis Raghavan joined to take over the division in 2024, the team has been adjusting the management structure.

This is the first report card since CEO Jane Fraser announced new profit targets in May. Overall, shareholders are generally optimistic about the company's development direction. As she continued to streamline and optimize Citibank's global business for many years, the bank's stock price has nearly doubled in the past 18 months.

At the Investor Day event in May, Fraser predicted that by 2031, Citi's return on tangible net assets (the core measure of profitability) of common stock would reach around 14%-15%. The bank's indicator for the second quarter recorded 13%, better than analysts' expectations of 11.3%.

This has added further impetus to Citi's reconstruction process. Last month, the bank also received public praise from US President Trump on social media. Trump's son Eric recently used his father's assets to set up a trust account with Citi. Fraser has been working to improve the company's relationship with Washington.

Despite overall exceeding expectations, the 45% growth rate of Citigroup's stock trading unit is still slower than its larger peers: J.P. Morgan grew 86% over the same period, and Goldman Sachs grew 72%.

The bank's efficiency ratio (measuring the cost of each dollar of revenue generated) fell to about 57%, and the gap with more profitable rivals such as J.P. Morgan Chase narrowed. J.P. Morgan Chase's ratio was 54% in the first quarter.

However, the consumer credit card business fell slightly short of analysts' expectations due to a 10% year-over-year increase in spending due to increased severance payments. Currently, the department is restructuring some teams to integrate the co-branded card business portfolio taken over from Barclays and cooperated with American Airlines Group.