Can Citigroup Deliver Double-Digit EPS Growth?

Shares of Citigroup Inc (NYSE: C) were up more than 1 percent on Wednesday, ahead of the company’s second quarter financial result scheduled for before the market opens on Thursday. The quarter is expected to bring an earnings growth rate in the 8 to 13 percent range.

In the second quarter last year, the financial services giant reported earnings of $1.24 per share on revenue of $19.324 billion. For the current quarter, the Street is modeling consensus earnings of $1.35 per share on revenue of $19.056 billion (Estimize). Meanwhile, the crowd is more bullish, and anticipates earnings of $1.40 per share on sales of $19.514 billion.

In a recent article, analysts at Zacks previewed Citigroup’s earnings. They note that, “Overall, banks’ trading business has been primarily hurt by weak activity during the second quarter. Despite continued uncertainty surrounding Greece and China that should have driven trading activities, tighter regulation and a risk-averse approach kept investors off financial activities.”

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Amid the low interest rate environment that persists, the experts don’t see Citigroup’s net interest revenue reversing its declining trend. Contrarily, they expect the net interest margin to fall by 2–3 basis points this quarter.

On the other hand, “investment banking revenue might get a lift from increasing M&A activities in the quarter that should drive advisory and underwriting revenues.”