Printer Friendly

CITICORP REPORTS PROFIT OF $446 MILLION IN 1993 SECOND QUARTER

 NEW YORK, July 20 /PRNewswire/ -- Citicorp (NYSE: CCI) today reported net income of $446 million in the 1993 second quarter, compared with $143 million in the same 1992 quarter. Fully diluted earnings per common share of $0.82 compared with $0.25 in the year-earlier quarter.
 In the first half of 1993, operating earnings were $816 million, or $1.49 per share, and net income, including the cumulative effect of adopting on Jan. 1 the new accounting standard for income taxes, was $1.1 billion, or $2.06 per share. Net income in the first six months of 1992 was $326 million, or $0.61 per share.
 John S. Reed, Citicorp chairman, commented: "Reflecting our continuing momentum, the quarter's earnings were marked by strong global trading results -- broadly distributed in terms of geography, product, and customer -- and greatly reduced credit costs. A number of troubled economies in the developed world have held down revenue growth, while revenues in developing countries have continued double-digit growth from last year. The value of our global franchises continues to serve us well."
 Mr. Reed noted that return on equity continued to improve, with ROE at 16.9 percent for the quarter and 15.7 perncent for the first half. The comparable figures for the 1992 periods were 4.8 percent and 6 percent.
 The company continued to build capital, with total regulatory capital at June 30, 1993, estimated as rising to $21.6 billion, or 10.3 percent of risk-adjusted assets, and the Tier 1 capital ratio increasing to 5.7 percent from 5.2 percent at the 1993 first quarter- end. A year earlier the total capital ratio was 8.5 percent and the Tier 1 ratio was 4.3 percent.
 Commercial credit costs decreased to $297 million, the sixth consecutive quarterly decline, from $380 million in the 1993 first quarter (and the $792 million peak amount in the 1991 fourth quarter). Consumer credit costs also decreased in the quarter, totaling $708 million, compared with $716 million in the 1993 first quarter and $838 million in the 1992 second quarter.
 An addition of $75 million was made in the second quarter to the consumer loan loss reserve, raising it to $1.5 billion from $1.2 billion a year ago, and $101 million was added to the commercial loan loss reserve, raising it to $2.4 billion from $2.0 billion a year ago.
 Citicorp's operating margin increased to $2.0 billion, up $240 million from last year's second quarter and $124 million from the 1993 first quarter, despite a 4 percent increase in adjusted operating expenses from the 1992 second quarter, reflecting in large part increased advertising programs in the U.S. and expenses related to consumer expansion in certain developing markets. Mr. Reed stated that "cost controls and productivity gains remain a firm priority." He also noted that the operating margin exceeded credit costs by $960 million, an amount that widened from $745 million in the 1993 first quarter and $498 million in the 1992 fourth quarter.
 Revenues were boosted by strong quarterly foreign exchange revenues of $352 million and the second consecutive quarter of record revenues from securities trading, which amounted to $220 million. In the comparable year-earlier quarter, revenues of $193 million were generated by foreign exchange trading and $121 million by securities trading.
 Global Finance revenues of $1.6 billion compared with $1.4 billion in both the same year-earlier quarter and the 1993 first quarter. Global Consumer adjusted revenues in the 1993 second quarter amounted to $2.7 billion, compared with $2.6 billion in both the same 1992 quarter and the 1993 first quarter.
 CORE BUSINESSES
 Global Consumer
 Net income in the Global Consumer businesses increased to $323 million in the quarter from $218 million in the second quarter of last year (excluding after-tax restructuring charges of $20 million) and $320 million in the first quarter of this year. In the 1993 first half Global Consumer earnings, reflecting strong performances in most areas, rose to $643 million from $444 million in the same 1992 period.
 By geographic breakdown, net income in the quarter from the consumer businesses in North America, Europe and Japan was $185 million, compared with $97 million (excluding restructuring charges) in the year-earlier second quarter. Net income from consumer businesses in Asia/Pacific, Latin America and other international regions was $138 million, compared with $121 million (excluding restructuring charges) in the same 1992 quarter.
 Revenues of $2.7 billion (adjusted for the effect of credit card securitization) rose by 5 percent from the 1992 second quarter and 3 percent from the first quarter of 1993. Operating expenses were higher than both the second quarter of last year (excluding 1992 restructuring charges) and the first quarter of 1993, primarily because of increased marketing programs and the business expansion in the developing economies.
 Consumer loans delinquent 90 days or more on the balance sheet as a percentage of total consumer loans remained stable at 1993 first-quarter levels of approximately 4.8 percent.
 Global Finance
 Global Finance reported second quarter net income of $451 million, compared with $291 million (including an after-tax restructuring charge of $27 million) in the year-ago quarter and with $353 million in the 1993 first quarter. The improvement was principally in European and North American businesses, reflecting record revenues for trading activities and lower credit costs.
 Revenues of $1.6 billion (excluding the cost to carry) were $177 million above those in the 1992 second quarter and $137 million above those in the 1993 first quarter. Expenses (excluding OREO costs) were $800 million, up $45 million from the 1992 second quarter, chiefly reflecting greater business activity in the developing economies.
 The credit provision in the quarter included net write-offs of $36 million, down from $126 million in the year-earlier second quarter and the same as in the 1993 first quarter. Commercial cash-basis loans of $1.3 billion were up $79 million from the 1993 first quarter, but were $403 million less than in the 1992 second quarter. OREO at June 30, 1993, was $654 million, a decrease of $108 million from the 1992 second quarter and flat with the 1993 first quarter.
 Global Finance includes the commercial and financial institutions businesses worldwide other than commercial real estate in North America.
 OTHER AREAS
 North America Commercial Real Estate
 Commercial real estate activities in the United States and Canada reported a net loss of $177 million in the quarter, compared with a loss of $356 million in the 1992 second quarter, an improvement that reflected a lower credit provision. A loss of $202 million was reported in the 1993 first quarter.
 Total exposure of $15.6 billion was down about $900 million for the quarter. Contributing to this decrease were sales of approximately $70 million and cash paydowns, maturities and cancellations of approximately $650 million.
 Net write-offs of $136 million continued their downward trend from a peak of $362 million in the 1992 first quarter. Cash-basis loans at June 30, 1993, were $2.5 billion, down from $2.9 billion in the same period of 1992 and $2.6 billion at March 31, 1993. OREO totaled $2.8 billion at the end of the 1993 second quarter, up from $2.6 billion a year earlier but down from $3.0 billion at March 31, 1993.
 Cross-Border Refinancing Portfolio
 The cross-border refinancing portfolio reported net income of $14 million in the quarter, compared with $105 million for the 1992 second quarter, which included a $100 million release of credit reserves, and with net income of $39 million for the 1993 first quarter. The difference in the results in the second quarter compared with those in the first quarter largely reflects variances in scheduled interest payments on Brazilian medium- and long-term outstandings.
 The allowance for credit losses attributable to the portfolio totaled $205 million at quarter-end after reflecting a write-off of $152 million related to Citicorp's medium-and long-term outstandings to Brazil. This write-off reduced the carrying value of affected Brazil outstandings to 30 percent of face value.
 Further progress was made during the second quarter in restructuring Brazil's medium- and long-term commercial bank debt. Revised commitments to Brazil's 1992 Financing Plan have been received from creditors holding more
than 90 percent of the country's external commercial bank debt. The restructuring agreement, when completed, would have generally positive future effects on the company's earnings, but the timing and amounts cannot yet be determined.
 CAPITAL
 The estimated Tier 1 capital ratio of 5.7 percent at June 30, 1993, compared with 5.23 percent at March 31, 1993, and 4.25 percent at mid 1992. Tier 1 capital rose $896 million during the quarter to $11.8 billion, compared with $9.3 billion at the end of the 1992 second quarter. The estimated combined Tier 1 and Tier 2 capital ratio of 10.3 percent compared with 10.01 percent at the end of the 1993 first quarter and 8.50 percent at June 30, 1992.
 Included in the increased capital in the 1993 second quarter was the public offering of $325 million of preferred stock.
 OTHER ITEMS
 Modest gains on asset sales in the quarter were more than offset by writedowns of certain holdings, resulting in an after-tax loss of $14 million, or $0.03 per common share. In the same year-earlier quarter, gains on sales of nonstrategic assets totaled $109 million after tax, or $0.30 per common share.
 Income taxes were $313 million for the second quarter, bringing the effective tax rate for the year to date to 43 percent, down from 45 percent reported in the first quarter of 1993 and 44 percent in the first half of 1992. The improved level and mix of earnings resulted in a reevaluation of the estimated effective tax rate for the year.
 A table giving financial highlights follows. (See note to editors below.) Further details concerning the financial results will be available in Citicorp's Form 10-Q to be published in August.
 KEY RATIOS & OTHER CONSOLIDATED FINANCIAL DATA
 Second Qtr. Year-to-Date
 1993 1992 1993 1992
 NET INCOME ($M):
 Before Cumulative Effect
 of Accounting Change $ 446 $ 143 $ 816 $ 326
 After Cumulative Effect
 of Accounting Change(A) $ 446 $ 143 $1,116 $ 326
 PER COMMON SHARE:
 On Common & Common
 Equivalent Shares
 Before Cumulative Effect
 of Accounting Change $ 0.88 $ 0.25 $ 1.59 $0.61
 After Cumulative Effect
 of Accounting Change(A) $ 0.88 $ 0.25 $ 2.26 $0.61
 Assuming Full Dilution
 Before Cumulative Effect
 of Accounting Change $ 0.82 $ 0.25 $ 1.49 $0.61
 After Cumulative Effect
 of Accounting Change(A) $ 0.82 $ 0.25 $ 2.06 $0.61
 Common Equity $ 23.96 $ 21.59
 Closing Stock Price
 at Quarter End $ 30.13 $ 21.25
 PROFITABILITY RATIOS (Annualized):
 Return on Assets (pct.):
 Before Accounting Change 0.79 0.26 0.73 0.30
 After Accounting Change(A) 0.79 0.26 0.86 0.30
 Return on Common Stockholders'
 Equity (pct.):
 Before Accounting Change 16.9 4.8 15.7 6.0
 After Accounting Change(A) 16.9 4.8 19.2 6.0
 CAPITAL ($B):
 Tier 1 $ 11.8 $ 9.3
 Tier 1 & 2 (B) $ 21.6 $ 18.5
 Tier 1 Ratio (B) (pct.) 5.7 4.3
 Tier 1 & 2 Ratio (B) (pct.) 10.3 8.5
 Common Equity as a
 pct. of Total Assets 4.2 3.6
 Total Equity as a
 pct. of Total Assets 5.8 4.5
 DIVIDENDS DECLARED ($M):
 Preferred $ 75 $ 50 $ 148 $ 100
 (A) -- Includes cumulative effect of adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", as of Jan. 1, 1993.
 (B) -- Estimated.
 -0- 7/20/93
 /NOTE TO EDITORS: Other tables detailing key financial data, an analysis of operating margin pretax earnings, business results and credit indicators are available upon request, along with financial statements./
 /CONTACT: John M. Morris (media), 212-559-4285, or Frederick A. Roesch (investors), 212-559-2715, both of Citicorp/
 (CCI)


CO: Citicorp ST: New York IN: FIN SU: ERN

GK -- NY001A -- 6562 07/20/93 08:35 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 20, 1993
Words:2004
Previous Article:CHEMDESIGN REPORTS SECOND QUARTER RESULTS
Next Article:FOREST LABORATORIES REPORTS FISCAL FIRST QUARTER RESULTS
Topics:


Related Articles
CITICORP REPORTS SECOND-QUARTER PROFIT AND FURTHER PROGRESS TOWARD PLAN GOALS
CITICORP REPORTS SUCCESSFUL COMPLETION OF TWO-YEAR PLAN WITH HIGHER CAPITAL, RESERVES AND EARNINGS
CITICORP REPORTS FIRST QUARTER EARNINGS OF $370 MILLION -- UP FROM $183 MILLION IN SAME 1992 QUARTER
CITICORP REPORTS FIRST QUARTER EARNINGS OF $370 MILLION -- UP FROM $183 MILLION IN SAME 1992 QUARTER
SEI RELEASES SECOND QUARTER 1993 RESULTS
HAKO MINUTEMAN REPEATS RECORD SALES;2ND-QUARTER OPERATING PROFITS UP 82 PERCENT ON 20-PERCENT SALES GROWTH
DUFF & PHELPS: CITICORP $350 MILLION SUBORDINATED NOTES RATED 'BBB'
DATAPOINT REPORTS THIRD QUARTER RESULTS
Caterpillar Posts Best Second Quarter Ever
Top wealth managers profits hit by expenses.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters