dailyloe.com – Citigroup reported first-quarter earnings on Tuesday that beat Wall Street estimates on both the top and bottom lines. The results marked the firm’s best quarterly revenue in a decade. Earnings per share jumped 56% year-over-year.
CEO Jane Fraser said the bank is on track to deliver its profitability target this year. She commented on the firm’s recent streamlining efforts in a statement. Fraser said, ‘We’ve entered into the final phase of our divestitures.’ She added that 90% of transformation programs are now at or near the target state.
The bank’s return on tangible common equity came in at 13.1%. This measure of profitability is the highest since 2021. It is above the firm’s goal of between 10% and 11% ROTCE.
Citigroup’s stock is the best performer year-to-date among large banks. The bank has gotten a boost from its turnaround effort. It has also benefited from relatively low valuations.
The firm has been streamlining its operations. It is working through several regulatory consent orders. Citigroup reportedly expects to complete these orders this year.
However, with its global footprint, Citigroup is perceived to be more impacted by geopolitics. This impact is seen as greater than many of its peers.
The markets division was a big driver of the first-quarter beat. The larger fixed income division gained 13% to $5.2 billion in revenue. Equities revenue jumped 39% to $2.1 billion.
Investment banking revenue came in light compared with estimates. An exception was equity underwriting, which beat expectations.
The unit comprising services showed revenue that increased by 17%. It reached $6.1 billion in the quarter. This figure surpassed Wall Street expectations.
Citi’s wealth and U.S. consumer cards divisions were slightly reconfigured. They were not comparable to estimates for the quarter. Each saw gains thanks to Citigold and retail banking.
The firm’s provision for credit losses was higher than expected. This was due to net credit losses in consumer cards. An allowance for credit loss build of $579 million also contributed.
Expenses were higher by 7% during the quarter. This increase was due to severance costs. Foreign exchange translation also contributed to higher expenses.[]
Source: CNBC
