Citigroup Inc. (NYSE:C) Q2 2018 Earnings Conference Call - Final Transcript

Jul 13, 2018 • 11:30 am ET


Citigroup Inc. (NYSE:C) Q2 2018 Earnings Conference Call - Final Transcript


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Hello and welcome to Citi's Second Quarter 2018 Earnings Review with CEO, Mike Corbat; and CFO, John Gerspach. Today's call will be hosted by Susan Kendall, Head of Citi IR. (Operator Instructions) Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Kendall, you may begin.

Susan Kendall

Thank you, Natalia. Good morning and thank you all for joining us. On our call today, our CEO, Mike Corbat, will speak first, then John Gerspach, our CFO, will take you through the earnings presentation, which is available for download on our website Afterwards, we'll be happy to take questions. (Forward-Looking Cautionary Statements) With that said, let me turn it over to Mike.

Mike Corbat

Thank you, Susan and good morning, everyone. Earlier today, we reported earnings of $4.5 billion for the second quarter of 2018 or $1.63 per share. Our earnings per share were 27% higher than a year ago as a result of improved business performance, a lower tax rate and a continued reduction in shares outstanding. Our EBT was up 5% as a result of revenue growth in both sides of the house, combined with continued expense and credit discipline. Loans and deposits increased 5% and 4%, respectively. Our efficiency ratio was 58%, 130 basis points better than a year ago; our return on assets was 94 basis points, 11 basis points higher than a year ago; and our return on tangible common equity improved to 10.8%, 300 basis points higher than a year ago. Global Consumer Banking had 3% revenue growth, including 6% internationally and Latin America, revenue increased 11%, while underlying growth in Asia was 4%, in-line with our medium-term expectations. In the US, we continued to grow our Retail Banking business and we closed the acquisition of the L.L.Bean portfolio in Retail Services. And in US Branded Cards, we saw strong interest-earning balance growth as our investments continued to mature.

Our Institutional Clients Group also grew revenue by 3%. While Fixed Income was in line with what we forecasted, our Equities business had another strong quarter, up 19% from the year before. And our accrual businesses continued to show strong growth across the board, especially Treasury and Trade Solutions, Securities Services, Corporate Lending, and the Private Bank. Investment Banking revenue delivered another solid quarter with good growth in advisory and equity underwriting.

Taking a step back for a moment, it was almost a year ago since we brought you all together to lay out our 2020 targets, so I think this morning is a good opportunity to recap some of the progress we've made since Investor Day. As you may recall, at the time, I spoke about three strategic priorities we would pursue to reach those financial targets. First was to deliver sustainable client-led growth by deepening our relationships with existing clients and reaching new clients within our targeted segments. Next was to leverage our scale and investments in technology to enhance the client experience and improve our operating