Citigroup profits up 31% as investment banking grows
Net income at third-largest US bank rose to $3.8 billion in first quarter under new CEO
Citigroup Inc reported a higher-than-expected 31 per cent rise in first-quarter profit today as it drew down loss reserves for mortgage loans, and revenue from its securities and investment banking business swelled. Photograph: Keith Bedford/Reuters
Citigroup Inc reported a higher-than-expected 31 per cent rise in first-quarter profit today as revenue from its securities and investment banking business swelled.
The third-largest US bank said net income rose to $3.8 billion, or $1.23 per share, in the period -- the first full quarter under chief executive Michael Corbat -- from $2.9 billion, or 95 cents per share, a year earlier.
"During the quarter, we benefited from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment," Mr Corbat said in a statement.
Under Mr Corbat Citigroup partly recovered from its embarrassing failure last year under former CEO Vikram Pandit to win approval from the Federal Reserve after a stress test for its plan to distribute capital.
Citigroup shares were up 2.7 per cent at $46 before the bell.
The company scored higher capital levels on a new test and received approval in March for its cautious application to spend $1.2 billion on stock buybacks. Citigroup has not asked to raise its quarterly dividend from its nominal level of one cent per share.
Excluding certain accounting adjustments, net income rose to $4.0 billion, or $1.29 per share, in the latest quarter, from $3.4 billion, or $1.11 per share, a year earlier.
Analysts on average had forecast earnings of $1.17 per share before the certain accounting adjustments.
Total revenue rose 6 per cent to $20.5 billion. Expenses fell 10 percent to $12.4 billion from the fourth quarter.
The bank said its net interest margin for the first quarter was 2.94 per cent, up marginally from 2.93 per cent in the fourth quarter.