Citigroup (US) stock trading revenue hit a record but still lagged behind peers, Q2 performance exceeded expectations across the board.

Citigroup's stock trading business reported record revenue, driving multiple core business lines to outperform Wall Street expectations. The financial report showed that Citigroup's second-quarter revenue was $24.8 billion, exceeding the market's general expectation of $23.7 billion; earnings per share were $3.15, higher than the average analyst expectation of $2.73. Citigroup's stock trading revenue in the second quarter increased by 45% year-on-year to $2.3 billion, 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, which is still smaller than that of top Wall Street competitors in the same category. The large bank's Q2 net interest income was $17.1 billion, exceeding the market's general expectation of $16 billion, an increase of 9% from the previous quarter and 13% year-on-year. Credit loss provisions in the second quarter decreased from $2.81 billion in the previous quarter and $2.87 billion in the same period last year to $2.52 billion, lower than the average analyst expectation of $2.73 billion. According to the financial report released on Tuesday, four out of the company's five main business segments - banking, services, markets, wealth - all exceeded analyst expectations. Earnings per share reached $3.15, better than the estimates of all 20 analysts. Like other major banks, Citigroup's investment banking division reported its highest revenue since 2021 - the industry-wide trading frenzy triggered by the turbulence of the pandemic in that year. Since Wes Lagow took over the department in 2024, the team has been adjusting its management structure. This performance is the first report card after CEO Jane Fraser announced new profit targets in May, and overall shareholders are generally optimistic about the company's direction. With her ongoing efforts to streamline Citigroup's global business for many years, the bank's stock price has nearly doubled in the past 18 months. At an investor day event in May, Fraser predicted that Citigroup's common stock tangible return on equity (a core measure of profitability) would reach around 14%-15% by 2031. The bank recorded a 13% return on this measure in the second quarter, better than analyst expectations of 11.3%. This adds momentum to Citigroup's rebuilding process, as the bank also received public praise from former President Trump on social media last month. Trump's son Eric recently set up a trust account at Citigroup using his father's assets. Fraser has been focused on improving the company's relationship with Washington. Despite exceeding expectations overall, Citigroup's stock trading unit's 45% growth rate is still slower than larger competitors: JPMorgan Chase grew by 86% in the same period, and Goldman Sachs Group, Inc. grew by 72%. The bank's efficiency ratio (measuring the cost of expenses for every $1 of revenue generated) has dropped to around 57%, narrowing the gap with more profitable competitors like JPMorgan Chase, which had a ratio of 54% in the first quarter. However, consumer credit card business slightly below analyst expectations, as increased severance costs led to a 10% increase in expenses. The department is currently restructuring some teams to integrate the co-branded card business acquired from Barclays and the partnership with American Airlines Group Inc.