Citigroup also experienced significant year-over-year growth in their net income with revenue reaching $4.8 billion for the bank, compared to $181 million for the same quarter last year, according to the bank’s earnings statement also released on Thursday.
The net income high at Goldman Sachs is mostly credited to the record first half results in Investment Banking and Investment Management. Net revenues for investment banking reached $2.02 billion for Q2, a 13 percent increase from Q2 2014 and 6 percent higher than Q1 2015. Net earnings were $1.05 billion, while diluted earnings per common share were $1.98 for Q2 ended June 30, 2015. Equities net revenues had its highest performance in six years, reaching $4.32 billion for the first half of 2015.
“We are pleased with our performance for the quarter,” said Lloyd C. Blankfein, chairman and CEO of Goldman Sachs. “While uncertainty in the EU weighed on investors’ level of conviction, many of our businesses continued to benefit from generally improving economic conditions and healthy client activity.”
The firm recorded $1.45 billion in net provisions for mortgage-related litigation and regulatory matters. These provisions reduced diluted earnings per common share for of 2015 by $2.77, and reduced annualized ROE for the second quarter of 2015 and the first half of 2015 by 6.7 and 3.4 percentage points, respectively.
Goldman also reported net revenues in Investing & Lending of $1.80 billion for the Q2 2015, 13 percent lower than the Q2 2014 and 8 percent higher than the Q1 2015. The drop in net decline in net revenues compared with Q2 2014 was primarily due to lower net revenues from investments in equities, as a decrease in net gains from private equities was partially offset by an increase in net gains from public equities.
The firm also noted that it ranked first in worldwide announced and completed mergers and acquisitions for the year-to-date, and also ranked first in worldwide equity and equity-related offerings and common stock offerings for the year-to-date.
Citigroup’s net income of $4.8 billion, or $1.51 per diluted share also consisted of revenues of $19.5 billion, compared to the banks $181 million, or $0.03 per diluted share, on revenues of 19.4 billion Q2 2014 results. The bank also reported a net interest margin of 2.95 percent.
The bank’s allowance for loan losses was $14.1 billion at the end of Q2, or 2.25 percent of total loans, compared to $17.9 billion, or 2.70 percent of total loans, at the end of the prior year period, Citigroup reported. Excluding the impact of the mortgage settlement, net loan loss reserve releases decreased 35 percent from the prior year period to $453 million. Loans were $632 billion as of quarter end, down 5 percent from the prior year period, and down 1 percent on a constant dollar basis.
"Our results for the quarter show very balanced performance across our business lines,” said Michael Corbat, CEO of Citigroup. “We grew loans and deposits in constant dollars in Global Consumer Banking, while also gaining wallet share among target clients in our Institutional Clients Group. Citi Holdings remained profitable and we again reduced its assets, having completed the sales of additional consumer businesses. As we increased our capital return, we still continued to grow our regulatory capital, raising our Common Equity Tier 1 Capital ratio to 11.4 percent. Through active expense and balance sheet discipline, we are on track to reach our financial targets for the year."