Revenues and net income march ahead at Citigroup

Citigroup reported first-quarter net income of $4.6bn on Friday, or $2.19 per diluted share, on revenues of $21.4bn.

The US banking giant said that was an increase from the first quarter of 2022, when it recorded net income of $4.3bn, or $2.02 per diluted share, on revenues of $19.2bn.

Its first quarter outcome included divestiture-related impacts of $953m in earnings before taxes, primarily driven by a gain on the sale of the India consumer business.

Excluding those divestiture-related impacts, earnings per share came in at $1.86.

That compared to divestiture-related impacts in the first quarter last year of -$677m in earnings before taxes, primarily driven by a goodwill impairment related to Asia Consumer Banking.

Revenues were up 12% from the prior year, and 6% excluding the divestiture-related impacts, as growth in net interest income was partially offset by lower non-interest revenues.

The company said the higher net interest income was driven by the impact of higher interest rates across businesses, including Services and Markets in Institutional Clients Group (ICG), as well as strong growth in average loans in US Personal Banking within Personal Banking and Wealth Management (PBWM).

It said the lower non-interest revenues reflected declines in Investment Banking and Markets in ICG, and lower investment product revenues in Global Wealth Management in PBWM.

Net income of $4.6bn was down 7% from the prior-year period, and 19% excluding the divestiture-related impacts.

The board said the increase in net income was primarily driven by the higher revenue, partially offset by higher expenses and higher cost of credit.

Earnings per share of $2.19 were 8% higher year-on-year, reflecting the higher net income as well as an approximate 1% decline in average diluted shares outstanding.

“Citi delivered strong operating performance, showing good revenue growth and expense discipline despite the tumultuous environment for banks,” said chief executive officer Jane Fraser.

“Our robust and well-managed balance sheet was a source of strength for our clients and we continue making progress in executing our strategy focused on our five core interconnected businesses while simplifying and transforming the firm.

“Treasury and Trade Solutions (TTS) continued to perform extremely well, growing non-interest revenue on new mandates and strong cross-border activity.”

Fraser also noted that said markets saw the “third best quarter” in the last decade in Fixed Income, while banking activity picked up from the end of 2022.

Citi’s two cards businesses were also showing momentum, the CEO reported.

“While it is not an ideal environment for wealth management, the drivers of this business continue to be very positive, and we announced that Andy Sieg will be joining us as its CEO later this year.

“We closed the sale of two consumer franchises, which contributed to our healthy pace of capital generation.”

Citi ended the quarter with a CET1 ratio of 13.4%, Jane Fraser added.

“We are committed to increasing the amount of excess capital we return over time as well as delivering with excellence for our clients and shareholders.”

At 0809 EDT (1309 BST), shares in Citigroup were up 2.54% in pre-market trading on the NYSE, at $48.50.

Reporting by Josh White for Sharecast.com.