Chillin' out till it needs to be funded
The latest acronym in town avoids the mouthful Basel III Tier I Capital requirement that has unleashed an unending wave of deleveraging in Europe but seems to have carried along global and US only banks fine despite the banning of Trust preferred and other holey Capital which is no longer counted toards Tier I. in the original Basel I norms, Citi achieved a Tier I ratio of 12.7% or a Book leveraged only 8 times its Capital. In Basel III terms that is still less than 16 times compared to a leverage of over 30 for European banks. Apart from that edge Citi , slated to report and set up for a press conference tomorrow, reported revenues of $18.6 B , setting a new mark for beating expectations ith a revenue miss of $2 B from the June Quarter of 2011. Net Income of $2.9 B is just 2% down on March 2012 and the IBIT (EBITDA in non banking sector companies) is still only 9% down from a $4.2 B to $3.7 B. The bank had earlier put its plans for an aggressive return of Capital to Investors on the backburner. For the To quarters of this year, EPS has ticked up to almost $2 at $1.91 and the sahre has suffered much more than the banks earnings, even CVA/DVA and loan losses not being an issue this quarter
BofA release is expected on Wednesday and the analyst conference starts at 0830 ET. goldman Sachs reports the big number to challenge tomorrow. Citi’s Deposits also grew by 1% to $914 B from prior quarter and the Book Value is upto $52 per share (Tangible BVPS) Bad bank winddowns have come down to $191 M this quarter. The bank made a sale of its stake in AkBaank exlcluding whoich the quarterly EPS is a round $1 Per share
Citi loan book has grown in double digits from June 2011 to $527 B. Loan loss allowances have gone down to 4.3% of book at $27 B GCB revenues of $9.8 B are barely more than 50% of the bank and in that North America at $5.1 B barely above 50% of the business Profits from the North America GCB are $1.2 B a good margin. Asia and Latin America contribute $2B and $2.4 B in revenues. International GCB made a large amount of profits at $4.6 B in Net Income
Securities and Banking revenue was subdued at $5.1 B of which lending revenues increased 70% but yet only $701 M but lower incentive compensation drove a 8% jump over june 2011 in Net Income at $1.4 B
Transaction Banking continues to grow at $2.8B Apparently mortgage banking has become cheaper but compared to JP Morgan and ells Fargo it ould not show for much at even Bank of America and Citi survived with absolutely the same performance as Q1 in GCB overall despite the drop in Credit costs of $3 B primarily from improving credit quality and sloughing of loan loss reserves and delinquency ratios of the Lehman age.