Second Quarter 2020 Results and Key Metrics

Citigroup revenues of $19.8 billion in the second quarter 2020 increased 5%, primarily reflecting the higher revenues in Fixed Income Markets and Investment Banking, partially offset by the lower revenues in GCB.

Citigroup operating expenses of $10.4 billion in the second quarter 2020 decreased 1%, as efficiency savings and lower marketing and other discretionary spend more than offset higher compensation expense, investments and COVID-19 related expenses.

Citigroup cost of credit of $7.9 billion in the second quarter 2020 compared to $2.1 billion in the prior-year period, reflecting the ACL builds related to the deterioration in Citi’s macroeconomic outlook since the end of the first quarter, the corporate loan downgrades and the qualitative management adjustment.

Citigroup net income of $1.3 billion in the second quarter 2020 declined 73%, driven by the higher cost of credit, partially offset by the higher revenues and a lower effective tax rate. Citigroup’s effective tax rate was 9% in the current quarter compared to 22% in the second quarter 2019, reflecting a higher relative impact from tax advantaged investments and other tax benefit items this quarter given the lower level of pre-tax income.

Citigroup’s allowance for credit losses on loans was $26.4 billion at quarter end, or 3.89% of total loans, compared to $12.5 billion, or 1.82% of total loans, at the end of the prior-year period. Total non-accrual assets grew 58% from the prior-year period to $5.9 billion. Consumer non-accrual loans declined 7% to $1.8 billion, while corporate non-accrual loans of $4.0 billion increased from $1.7 billion in the prior year period.

Citigroup’s end-of-period loans were $685 billion as of quarter end, largely unchanged from the prior-year period. Excluding the impact of foreign exchange translation6, end-of-period loans grew 1%, driven by 5% growth in ICG, partially offset by lower loans in GCB and the continued wind-down of legacy assets in Corporate / Other.

Citigroup’s end-of-period deposits were $1.2 trillion as of quarter end, an increase of 18% from the prior-year period. In constant dollars, Citigroup’s end-of-period deposits increased 20%, driven by 15% growth in GCB and 22% growth in ICG.

Citigroup’s book value per share of $83.41 and tangible book value per share of $71.15 each increased 5% versus the prior-year period, driven by a reduction in common shares outstanding. At quarter end, Citigroup’s CET1 Capital ratio was 11.5%, up from the prior quarter, primarily reflecting a decline in risk-weighted assets. Citigroup’s SLR for the second quarter 2020 was 6.7%, an increase from the prior quarter. During the quarter, Citigroup returned a total of $1.1 billion to common shareholders in the form of dividends.

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