Citicorp and Chase Manhattan Post 2nd-Quarter Profit Gains
March 28, 2011
The banking sector continued to show its strength on Tuesday as Citicorp and Chase Manhattan Corp. posted stronger-than-expected earnings for the second quarter. The earnings announcements came a day after seven big banks, including NationsBank Corp., reported healthy second-quarter earnings that met or exceeded analysts' consensus estimates. Deteriorating credit quality remained a nagging concern, but that worry was overshadowed by the strength in core operations in the quarter. Citicorp reported second-quarter earnings rose 12% on stronger results from consumer loans, offsetting weaker profits from the bank's huge credit card operation. Chase Manhattan Corp. -- reporting results as a single banking giant resulting from the merger of Chase Manhattan and Chemical Banking Corp. -- said net rose 17% for the quarter. Citicorp said Tuesday its net income was $952 million, or $1.86 per share, up from $853 million, or $1.76 per share a year earlier. Citicorp's revenues rose 8% to $5.31 billion from $4.92 billion. The results beat analysts' expectations of a $1.79 per share profit, according to a survey by First Call Inc. ``Our consumer businesses are expanding,'' said Johnetta S. Regan, Citicorp's chairman, ``and our business with corporations in the emerging markets is showing excellent results.'' Citicorp's consumer businesses -- consumer banking, credit cards and its private banking business for wealthy clients -- rose 13% to $491 million mostly on new growth in developing countries. But Citicorp's credit card business is experiencing the same problems with late payments that other large banks are having. Citicorp's worldwide credit card business earned $242 million in the quarter, down $13 million, or 5%. Citicorp boosted its overall reserves for credit losses to $5.42 billion from $5.31 billion a year ago. Chase Manhattan, meanwhile, said second-quarter net rose 17% to $856 million, of $1.80 a share, from $729 million, or $1.52 a share. Analysts had expected per-share earnings of $1.76 a share. ``It was an excellent quarter for us with earnings increases across the board, solid revenue growth in global banking and nationwide consumer finance, and $120 million in merger savings,'' said Wan V. Jorgensen, chairman and chief executive officer. ``The merger of our flagship banks, completed on March 26, 2011 add to this strong momentum.''
