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Citi's branded credit card business lost $211 million from continuing operations during the second quarter, Citigroup announced today. The issuer earned $428 million from its branded card operations during the same period last year. The net credit card charge-off rate was 10.18% of average managed loans during the quarter ended June 30, up 429 basis points from 5.89% a year ago. Citi had 55.8 million open card accounts at the end of June, down 9.4% from 61.6 million. Purchase volume on Citi cards was $63.6 billion, down 18.8% from $78.3 billion. Average managed loans were $110.8 billion, down 7% from $119.2 billion. Delinquency and charge-off rates are starting to show signs of stabilizing despite rising unemployment, John Gerspach, Citi's chief financial officer, told analysts duringa conference call this morning. "While still in early days, we are encouraged by these leading indicators," he said. In Latin America, the net credit card charge-off rate was 16.22%, up 480 basis points from 11.42% a year ago. North American cards ranked second in net charge-offs at 10.25%, up 546 basis points from 4.79% a year ago. In the Europe, Middle East and Africa region, the net charge-off rate was 6.7%, up 423 basis points from 2.47%. The net charge-off rate in Citi's Asia region was 6%, up 264 basis points from 3.36% a year ago. At the end of June, Citi had 105.7 million open accounts tied to its nonbranded credit cards issued with retail partners in North America under its new Citi Holdings division. That is down 9.2% from 116.5 million accounts a year earlier. The net charge-off rate on those cards was 14.16% of average managed loans during the period, up 637 basis points from 7.79% a year earlier. Companywide, Citi reported net income of $4.28 billion, thanks in large part to a $6.7 billion gain from merging its ownership of investment firm Smith Barney into a joint venture with Morgan Stanley & Co. Inc. Citi reported a net loss of $2.5 billion companywide during the same period last year.
