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Commercial banks

Citicorp Reports 3% Lower Net Income in Second Quarter 1995

Strategic Insights

— 1 min read

Citicorp's second quarter 1995 earnings reflected sustained performance in diverse economic environments, with revenues up 3% and operating expenses up 14%. The bank's global consumer business led the increase with a 10% growth, and the company's balance sheet was strengthened with total capital at $27.3 billion and a Tier 1 ratio of 8.4%. Citibank expanded its global leadership position with a 14% increase in the number of cards worldwide to 57 million.

Key Takeaways:

  • Citicorp's net income in the second quarter 1995 was $853 million, a 3% decrease from the same 1994 quarter.
  • Earnings before income taxes were 25% higher in the 1995 second quarter than in the same year-earlier quarter.
  • Revenues were up 3% in the second quarter 1995, led by a 10% increase in the global consumer business.
  • Operating expenses increased by 14%, approximately 7% from business expansion, 3% from currency translation, and 1% each from marketing programs, investments in technology, incentive compensation, and other items.
  • Operating margin improved by 20% to $2.1 billion.
  • Total regulatory capital at June 30, 1995 was $27.3 billion, estimated to be 12.4% of risk-adjusted assets.
  • The Tier 1 capital ratio was estimated to be 8.4%, slightly above the target range.
  • Consumer credit costs increased by $31 million to $616 million, primarily driven by higher volumes in U.S. cards.
  • Global Finance worldwide revenues increased by 37%, primarily driven by higher trading revenues.
  • Citibank opened a branch for corporate banking in Bangladesh and a subsidiary in Tanzania during the quarter.
  • The company received regulatory authorization to underwrite and deal in equity securities in the United States.

Statistics:

  • Net income in the second quarter 1995 was $853 million.
  • Earnings before income taxes were 25% higher in the 1995 second quarter than in the same year-earlier quarter.
  • Revenues were up 3% in the second quarter 1995, totaling $695 million.
  • Operating expenses increased by 14%, totaling $4.3 billion.
  • The credit loss reserve on the balance sheet totaled $5.3 billion at June 30, 1995.
  • Total regulatory capital at June 30, 1995 was $27.3 billion.
  • The Tier 1 capital ratio was estimated to be 8.4%.

Sources:

  • "Citicorp Reports Second Quarter Earnings," Business Wire, July 18, 1995.
  • "Citicorp 1995 Second Quarter Earnings Release," Citicorp, July 1995.

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