Citigroup (C $27.61 +0.97 reported second quarter earnings of $0.95 per share, $0.05 better than the Capital IQ Consensus Estimate of $0.90; revenues fell 9.6% year/year to $18.64 bln vs the $18.94 bln consensus. Citigroup revenues of $18.4 billion, excluding CVA/DVA, were 10% lower than the prior year period. Excluding both CVA/DVA and the loss on Akbank, Citigroup revenues were 7% below the prior year period. The decline in revenues year-over-year was driven by the ongoing wind down of Citi Holdings, which reduced revenues in Citi Holdings by 62% versus the prior year period, while Citicorp revenues were essentially unchanged. Citicorp revenues of $18.0 billion in the second quarter 2012 included $198 million of CVA/DVA. Excluding CVA/DVA, Citicorp revenues were $17.8 billion, unchanged from the second quarter 2011. The results reflected a 2% decline in Securities and Banking revenues (excluding a positive CVA/DVA of $198 million) that was offset by a 5% increase in Transaction Services revenues, while Global Consumer Banking (GCB) revenues were unchanged versus second quarter 2011. Citi Holdings revenues of $924 million in the second quarter 2012 were 62% below the prior year period.

Lower revenues in the Special Asset Pool and in Local Consumer Lending largely drove the decline in Citi Holdings revenues from the prior year period, partially offset by an increase in Brokerage and Asset Management revenues. Total Citi Holdings assets declined $74 billion, or 28%, from the second quarter 2011, to $191 billion. Citi Holdings assets at the end of the second quarter 2012 represented approximately 10% of total Citigroup assets. Citigroup's net income declined 12% from the second quarter 2011 to $2.9 billion. Excluding the impact of CVA/DVA and the loss from the Akbank sale, Citigroup net income was $3.1 billion, 1% lower than the second quarter 2011. Operating expenses of $12.1 billion were 6% lower than the prior year period. Citigroup's cost of credit in the second quarter 2012 was 17% below the prior year period, reflecting a $1.6 billion improvement in net credit losses which was partially offset by a $1.0 billion reduction in net loan loss reserve releases. Citigroup's total allowance for loan losses was $27.6 billion at quarter end, or 4.3% of total loans, compared to $34.4 billion, or 5.4%, in the prior year period. The $984 million net release of loan loss reserves in the quarter was down 50% from the prior year period. Reserve releases in Citicorp of $715 million and in Citi Holdings of $269 million were 49% and 54% lower, respectively, than the second quarter 2011. Citicorp's decline in loan loss reserve releases reflected lower releases in North America GCB and Securities and Banking and a net credit reserve build in international GCB (Asia, Latin America and EMEA). Citigroup's capital levels and book value continued to increase versus the prior year period. At the end of the second quarter 2012, book value per share was $62.61 and tangible book value per share was $51.81, 4% and 6% increases, respectively, versus the prior year period end. Citigroup's Tier 1 Capital Ratio was 14.4%, its Basel I Tier 1 Common Ratio was 12.7%, and its estimated Basel III Tier 1 Common Ratio was 7.9%.