Citigroup sees earning rise in Q2 by 16% on reduced income tax

Citigroup, the third-largest US bank by assets has reported a 16 per cent profit in second quarter on Friday, as a result of lower taxes and higher revenue and in its consumer banking business in Mexico.

The bank said it earned $4.49 billion, up from $3.87 billion a year ago. On a per-share basis, Citi earned $1.63 a share, compared with $1.28 a share a year earlier. Analysts had expected Citi to earn $1.56 a share.

Like JPMorgan Chase, which reported its results on Friday as well, Citi grew its loans and assets in the quarter. The bank benefited from higher interest rates, which allowed it to charge borrowers more for loans. But revenue growth was tepid, rising only 2 percent from a year earlier to $18.47 billion

So most of Citi’s profit growth this quarter came because its tax bill dropped, as it did in the first quarter. The amount of money Citi paid in taxes last quarter dropped 20 percent from a year earlier to $1.44 billion from $1.76 billion a year earlier.

Citi shares fell 1.4 percent in early trading to $67.60. They are down roughly 8 percent this year.