Citigroup has posted a smaller-than-expected 27% drop in the second quarter of 2022 as the bank’s trading desk took advantage of the increased market volatility, offsetting a slump in its investment banking unit.

The US-based banking group reported a net income of $4.5bn for the three months ended on 30 June 2022, compared with $6.1bn in the same quarter 2021.

Revenues for the group totalled to 19.6bn, a rise of 11% from 17.7bn in the prior-year period.

The net interest income rose 14% to $11.96bn due to higher rates as well as strong volumes across Institutional Clients Group (ICG) and Personal Banking and Wealth Management (PBWM), the bank said.

Non-interest revenue also increased, driven by Fixed Income Markets and Services in ICG, which more than offset lower non-interest revenue in Investment Banking in ICG and PBWM.

Citi PBWM revenues increased 6% year-on-year to $6bn in the quarter. The unit’s operating expenses increased 12% to $4.0bn in Q2 while net income fell by 69% to $553m.

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Citi CEO Jane Fraser said: “In a challenging macro and geopolitical environment, our team delivered solid results and we are in a strong position to weather uncertain times, given our liquidity, credit quality and reserve levels. I am particularly pleased with our capital strength.

“We ended the quarter with a Common Equity Tier 1 ratio of 11.9%, having built capital due to a higher regulatory requirement. We intend to generate significant capital for our investors, given our earnings power and the upcoming divestitures.”