The big US financial institutions are reducing their risk provisioning due to the economic recovery from the Corona crisis - this is benefiting the balance sheets.
Business is not going well everywhere.
New York - The US financial giant Citigroup earned significantly better in the second quarter due to a sharp decrease in capital buffers for loans at risk of default.
In the quarter to the end of June, the bank wrote a bottom line profit of 6.2 billion dollars (5.2 billion euros), as it announced on Wednesday in New York.
Citigroup thus performed better than expected by experts.
The share started trading in the US with significant price increases.
"The pace of global economic recovery is exceeding our expectations," said Citi CEO Jane Fraser.
The business climate and consumer confidence are on the upswing.
A year ago, when the pandemic had a firm grip on the global economy, the banking industry had prepared itself for the worst.
High provisions due to a feared wave of loan defaults in the Corona crisis caused Citigroup's quarterly results to collapse to $ 1.1 billion at the time.
But a sustained economic crash could be averted thanks to enormous government aid.
The prospects are much better now.
Citigroup was able to reduce its loan loss provisions and released provisions of $ 2.4 billion in the most recent quarter.
The balance sheet benefited from this effect.
Day-to-day business, however, did not go particularly well.
Overall, group-wide revenues fell twelve percent to $ 17.5 billion.
The credit card business continued to weaken.
In addition, low interest income, a slump in the trading business with fixed-income securities and rising spending put a strain on the financial institution.
Bank of America also increased its quarterly profit strongly.
The surplus was 9.2 billion dollars (7.8 billion euros), more than two and a half times as high as a year earlier, as the financial group announced.
In addition to the reduction in risk provisioning, a positive tax effect also caused earnings to rise sharply.
Revenues, however, fell four percent to $ 21.5 billion.
The US credit giant Wells Fargo earned in the three months to the end of June, according to its own information, 6.0 billion dollars (5.1 billion euros).
A year ago, high provisions for impending loan defaults in the corona pandemic caused a loss of $ 3.8 billion.
Wells Fargo has now also dissolved a substantial part of it, which allowed the quarterly result to rise sharply.
dpa