Citigroup Earnings Dominated by Deep Discount to Book Value

Deposits were $908 billion as of the end of the quarter, down 6% from the same period last year. At the same time, loans totaled $632 billion, down 5%, and loan losses were $14.1 billion, or 2.25% of total loans.

Book value per share was $68.27 for the second quarter, and tangible book value per share was $59.18, representing 2% and 4% increases respectively. Currently the stock trades at a 15.6% discount to book value per share.

At quarter end, Citigroup’s Common Equity Tier 1 Capital ratio was 11.4%, up from 10.6% in the prior year period.

Separately, Citigroup repurchased about 28 million common shares and returned a total of $1.7 billion to common shareholders in the form of share repurchases and common stock dividends.

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Michael Corbat, CEO of Citigroup, commented on earnings:

Our results for the quarter show very balanced performance across our business lines. We grew loans and deposits in constant dollars in Global Consumer Banking, while also gaining wallet share among target clients in our Institutional Clients Group. Citi Holdings remained profitable and we again reduced its assets, having completed the sales of additional consumer businesses. As we increased our capital return, we still continued to grow our regulatory capital, raising our Common Equity Tier 1 Capital ratio to 11.4%. Through active expense and balance sheet discipline, we are on track to reach our financial targets for the year.

Shares of Citigroup closed Wednesday up 1% to $56.46, in a 52-week trading range of $46.60 to $57.64. After the earnings were released, shares were up 2.5% at $57.87 in Thursday’s early trading indications. The stock has a consensus analyst price target of $63.64.