Citigroup profit jumps 30%
Citigroup Inc.’s first-quarter profit jumped 30% as the giant bank tries to emerge from the shadow of the financial crisis under new Chief Executive Michael Corbat.
Citi said Monday it earned $3.8 billion, or $1.23 a share, in the first quarter, up from $2.9 billion, or 95 cents, during the same period a year ago, beating analysts’ estimates.
The bank’s shares gained $1.15, or 2.6%, to $45.93 in early trading on Wall Street.
Revenue of $20.5 billion grew 6% from $19.4 billion in the first quarter of last year. The bank reported strong gains in investment banking, trading and loan growth, while profit in its global consumer banking unit declined 11% year over year.
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Citi’s financial results benefited from the release of $652 million in loan-loss reserves, though that amount was less than the $1.2 billion of reserve releases the same period a year ago.
Citi was also able to pare losses in its Citi Holdings segment, a repository for its troubled mortgage investments that has dragged heavily on earnings. Citi Holdings reported a loss of $794 million, narrower than the loss of $1 billion in the same quarter a year ago.
The New York-based bank has been cutting staff and pruning branches as it struggles to streamline operations. Citi announced late last year that it would lay off 11,000 employees. Still, expenses increased by 1% in the quarter.
Corbat said the bank’s capital levels improved in the quarter.
“It is critical that Citi be viewed as an indisputably strong and stable institution and we made progress towards that goal,” Corbat said in a statement.
However, he noted, “the environment remains challenging and we are sure to be tested as we go through the year.”
Corbat took over Citi last year following the abrupt exit of Vikram Pandit as chief executive Pandit’s resignation in October was attributed to a long-simmering dispute with the bank’s board.
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