Citi 2Q12 Conference Call Summary

Quotes of interest pulled from the C 2Q12 call:

  • On a macro level, we believe the euro zone overhang will continue. Our on the ground sense of the emerging markets leaves us more positive than we were a few months ago, and maybe even better than some market perceptions.
  • In the U.S. consumer demand and Basel loan demand remain low, as consumers continue to deleverage. And as Federal banks have lowered interest rates, the margin from lending has decreased, and it is expected rates will stay low for the near future.
  • Citigroup end-of-period loans grew 1% year-over-year to $655 billion as continued loan growth in Citicorp outpaced the wind-down of Citi Holdings, and deposits grew 6% to $914 billion.
  • Total Citicorp loans grew 10%, with consumer up 2% and corporate loans up 22%. Excluding FX, Citicorp loans grew 13% with consumer up 5%.
  • SWe ended the quarter with a $191 billion in Citi Holdings were roughly 10% of total Citigroup assets. The $18 billion reduction in the second quarter included roughly a $11 billion of sales approximately $6 billion of net runoff and pay-downs and $1 billion of net credit and net asset marks.
  • …Global Consumer Banking, overall credit quality remains good, with continued improvement in North America and stable credit in Asia and Latin America. 
  • Latin America, despite the noise this quarter from FX was the fastest growing of our regions in consumer….particularly in Mexico
  • Asia consumer revenue growth has slowed…retail investors in Asia have de-risked giving the same global macro concerns…specific country slowdowns, most notably in Korea where policy actions by the government have trimmed the availability of consumer credit in that market…
  • …some revenue headwinds for Asia, into the third and fourth quarters. 
  •  North America consumer benefited from another quarter of strong mortgage activity…however, in cards…[reflect] ongoing economic uncertainty and deleveraging
  • …do not infer from the situation of one LIBOR submitting bank that every bank is in the same or a similar position…
  • There are still an awful lot of foreclosed – or foreclosures and profits that had yet to hit the market. So I don’t look at this yet as being a robust housing situation…the early 90s were small potatoes compared to what we’re going through now