Citi posts highest profit since financial crisis, shares rise
By Neha Dimri and David Henry
(Reuters) - Citigroup Inc, the third biggest U.S. bank by assets, reported its highest quarterly profit since the financial crisis as Chief Executive Michael Corbat's restructuring and cost-cutting efforts paid off and the bank's legal expenses plunged.
Under Corbat, who replaced Vikram Pandit as CEO in 2012, Citi has been selling retail operations in several countries, shrinking its U.S. branch network and disposing of non-core businesses.
The bank's shares rose 3 percent to a six-and-a-half-year high of $58.18 on Thursday after its adjusted earnings handily beat analysts' estimates.
Operating expenses in Citicorp, which holds the bank's core businesses, fell 6 percent to $9.8 billion in the second quarter.
Citi shrank the assets of Citi Holdings, which houses businesses it plans to sell, by 22 percent compared with 19 percent in the first quarter. The unit posted earnings of $157 million.
"Through active expense and balance sheet discipline, we are on track to reach our financial targets for the year," Corbat said in a statement.
Corbat set out two years ago to increase Citi's return on assets and make it more efficient. He also aimed to raise the bank's return on equity, but faced hurdles when the U.S. Federal Reserve rejected his capital-return plan.
The Fed finally approved the bank's new buyback plan in March and allowed it to raise dividend for the first time since 2008. Continued...