""Citigroup"":http://www.citigroup.com/citi/ reported a net income of $4.2 billion for the second quarter as credit losses diminished.[IMAGE]
The bank's Q2 earnings represent a 42 percent increase over Q2 2012's estimated $2.9 billion.
According to Citi's quarterly earnings filing, the increase ""was driven by the higher revenues and lower net credit losses, which were partially offset by higher legal and related costs, a lower loan loss reserve release and a higher effective tax rate.""[COLUMN_BREAK]
Citi's allowance for loan losses was $21.6 billion--3.4 percent of total loans--as of the quarter's end compared to $27.6 billion (4.3 percent of total loans) at the end of the prior-year period. The loan loss reserve release totaled $784 million in the quarter, down 22 percent year-over-year.
Citi also reported a 4 percent decline in retail banking revenues to $1.6 billion, ""reflecting lower mortgage origination and servicing revenues ... partially offset by a gain of approximately $180 million of the sale of a mortgage portfolio during the quarter."" Retail banking revenues are expected to continue to suffer from lower mortgage origination revenues and spread compression, the bank said.
On the positive said, CEO Michael Corbat noted Citi is on track as far as Basel III is concerned, saying, ""We increased our already strong capital levels, reaching an estimated Basel III Tier 1 Common ratio of 10 percent. Generating consistent and quality earnings is a key priority and this quarter met that goal.""