Citigroup earnings Q2 2018

Citigroup shares fell on Friday after the banking giant reported weaker-than-expected quarterly revenue, driven by a decline in corporate lending. The company’s earnings per share, however, topped estimates.

Here is how Citigroup’s second-quarter results fared against Wall Street estimates:

• Earnings: $1.63 per share vs $1.56 forecast by Thomson Reuters
• Revenue: $18.469 billion vs $18.512 billion expected by Reuters

The company’s stock fell by 1 percent in the premarket.

Revenue grew by 2 percent on a year-over-year basis, as corporate-lending revenue dropped by 20 percent, offsetting growth in the bank’s global consumer banking and institutional clients segments.

Corporate lending revenue totaled $528 million in the second quarter, down from $661 million in the year-earlier period. Sales from consumer banking and institutional clients totaled $8.25 billion and $9.691 billion, respectively, representing growth of 2 percent and 3 percent.

Still, CEO Michael Corbat said in a statement that Citigroup “we drove strong year-over-year revenue growth in many of our businesses – including our International Consumer franchise, Treasury and Trade Solutions, Equities, and the Private Bank. And we continue to support our clients as evidenced by solid loan growth that was balanced across businesses and geographies.”

The company also said its earnings per share grew by 27 percent on a year-over-year basis as net income rose 16 percent to $4.49 billion and as its shares outstanding decreased by 8 percent. Citigroup said the rise in net income was driven by a lower effective tax rate, which fell to 24 percent from 32 percent.

But Citigroup also delivered disappointing results on deposits and trading. Deposits for the quarter totaled $996.7 billion, below a StreetAccount estimate of $1.009 trillion. Meanwhile, fixed income trading revenue came in at $3.08 billion, slightly under a forecast of $3.11 billion. Equities trading raked in $864 million, while analysts polled by StreetAccount expected a total of $1.1 billion.

Shares of Citigroup were down more than 8 percent for the year heading into Friday’s report, lagging peers such as Bank of America and J.P. Morgan Chase. Bank of America and J.P. Morgan were down more than 2 percent and 0.8 percent, respectively.

Citigroup announced in late June that it would hike its quarterly dividend by 13 cents to 45 cents a share, and buy back $17.6 billion in stock over the next 12 months after passing the Federal Reserve’s annual stress test.

The bank reported better-than-expected earnings and revenue for the first quarter in April. Its results from that time period got a boost from lower corporate taxes and strong trading revenue.

Earlier Friday, J.P. Morgan kicked off earnings season when it reported its second-quarter results.

Citigroup CEO Michael Corbat will be on CNBC’s Closing Bell on Monday at 3 p.m. ET.