NEW YORK (CNNfn) - Citigroup Inc. and Bank of America Corp., two of the nation's largest banks, reported second-quarter earnings Monday that beat forecasts|
But Bank of New York, another major bank, came up just short of expectations, and cautioned about growth in the current economic environment.
Citigroup (C: up $0.64 to $49.50, Research, Estimates), the New York-based banking, brokerage and insurance company that is the nation's largest financial services company, said it earned $3.8 billion, or 74 cents a diluted share, from core operations before special items. That's better than the 73 cents a share forecast of analysts surveyed by earnings tracker First Call as well as the $3.3 billion, or 65 cents a share, it earned a year earlier.
Revenue at Citigroup, a component of the Dow Jones Industrial average, grew 8 percent to $20.3 billion. The company saw improved results from its CitiFinancial lending unit, North American credit card business, private bank and emerging market operations. The company's stock rose more than 3 percent in trading after the announcement.
Net income, which includes the impact of a change in accounting practices as well a severance charge for staff reductions, increased to $3.4 billion, or 69 cents a share, from $3.3 billion, or 65 cents a share, a year earlier.
The company also raised its dividend 22 percent to 16 cents from 14 cents a share to shareholders of record on Aug. 6, 2001. The company said this is the 15th straight year that Citigroup or its predecessor company Travelers Group Inc. has raised its dividend since it was created in 1986.
Bank of America (BAC: up $1.51 to $61.76, Research, Estimates), earned $2.02 billion, or $1.24 a diluted share, compared with $2.06 billion, or $1.23 a share, a year earlier. Earnings per share increased due to a 15 million share repurchase program during the latest period. The Charlotte, N.C.-based bank beat the $1.18-a-share forecast by First Call.
Its stock jumped nearly 3 percent in early Monday trading.
Revenue at Bank of America, the nation's No. 3 bank in terms of assets after Citigroup and J.P. Morgan Chase & Co. (JPM: down $1.02 to $41.53, Research, Estimates), rose 8 percent to $8.9 billion in the quarter.
Net interest income rose 9 percent, due to a favorable change in loan mix, lower funding costs and increased trading activities. It also saw an 11 percent increase in consumer banking fee income and 22 percent growth in investment banking income. Its shares ticked up slightly following the news.
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Meanwhile, Bank of New York (BK: down $5.78 to $43.62, Research, Estimates) earned $385 million, or 52 cents a diluted share, just below First Call's forecast of 53 cents, but up from $356 million, or 48 cents a diluted share, a year earlier.
It said it expects growth in the third quarter to be in line with second-quarter growth. First Call's forecast is for third-quarter earnings of 54 cents a share, up from 49 cents a year earlier. The bank's stock plunged 8 percent in early trading following the announcement Monday.