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Citi open to M&A opportunities as it considers unleashing capital

Citigroup Inc. CEO Michael Corbat said July 14 that he is open to merger and acquisition opportunities as the company thinks about deploying excess capital.

In Citi's earnings call, Corbat said the bank has the capital and financial health to make M&A moves — a fact he said was validated by the Federal Reserve's most recent stress test review, which cleared Citi's plan for capital distributions.

But Corbat said that any non-organic strategy for deploying capital, M&A or otherwise, would have to involve products or businesses that Citi already operates in.

"If some things in footprint, in strategy, in price make sense, we're happy to go after it," Corbat said.

Corbat said the Fed's Comprehensive Capital Analysis and Review results were "so important" and will allow Citi to reduce the amount of held capital and drive higher return for investors.

During the call, Citi said its $3.55 billion in net income for the second quarter was the result of growing revenue from its branded cards portfolio and investment banking services.

Citi reported revenues of $2.1 billion for its branded cards, a 10% increase year over year. In addition to contribution from its Costco portfolio, which was acquired in June 2016, Citi CFO John Gerspach said he saw modest core organic growth in addition to a healthier credit market. Citi said its branded cards had net credit losses of 2.9%, down from the prior quarter.

The company also grew its investment banking revenues by 22% year over year to $1.5 billion, due to strength in equity underwriting and M&A. Gerspach said the business also saw continued momentum in debt underwriting.