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Citigroup reported better than expected profits in the first quarter, in a sign that the recent revamp of the US’s fourth-largest lender may be starting to pay off.
Citi reported net income of $3.4bn in the quarter, down 25 per cent from a year ago, but better than the $2.3bn analysts had forecast.
The bank last year instigated its most significant reorganisation in nearly two decades in an effort to reverse years of lacklustre share price performance.
Profits in the quarter were weighed down by hundreds of millions of dollars in severance and other one-off charges, as well as $250mn in additional charges related to last year’s regional bank failures.
Revenues from operations rose 3 per cent in the quarter to $21bn, again better than analysts had expected.
The biggest profit driver was its corporate and investment bank, where fees jumped by around 50 per cent from a year ago.
But a number of the bank’s businesses — including credit cards and corporate transaction services — did better than expected in a quarter that many thought would be marred by the upheaval of the restructuring, which was announced late last year and has resulted in as many as 5,000 dismissals, many of which were announced during the first quarter.
Some of Citi’s businesses continued to struggle, including its wealth management division. Revenue from the bank’s massive bond and commodities trading unit, one of its biggest money generators, fell 10 per cent in the quarter.
Expenses rose slightly from a year ago, even after adjusting for one-time charges, despite efforts to bring down costs as part of the restructuring.
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