Credit Costs Sends CITI Cards? Income Down

Citigroup Inc. reported Friday its net income rose 18 percent in the second quarter to $6.2 billion from $5.3 billion in the second quarter of 2006. Revenues rose 20 percent to $26.6 billion.

Citi increased its provision for loan losses in the U.S. market under its Global Consumer division to $1.5 billion from $827 million, a rise of nearly 82 percent.

The U.S. Cards division saw a 2 percent decline in revenue to $3.2 billion while net income fell 17 percent to $726 million. Cit attributed the decline to higher credit costs.

Citi reported card receivables of $140.1 billion at the end of the quarter, down slightly from $140.7 billion a year ago. Receivables in the bankcard portfolio tallied $108.9 billion and $31.2 billion in the private label portfolio.

The U.S. Card’s net credit loss ratio was 4.39 percent, a 28 basis point increase from 4.11 percent in the second quarter of 2006. Managed net credit losses rose 11 percent to $1.6 billion.

Managed loans 90 days past due at the end of the second quarter were valued at nearly $2.1 billion, down 8 percent from $2.0 billion.

CNNMoney reported today that China’s Industrial and Commercial Bank surpassed Citi as the largest bank in the world ranked by market capitalization. The Chinese bank was valued at $254 billion on Friday compared to Citi’s $251 billion.