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Citigroup Shares Rise After First-Quarter Revenue Tops Expectations

Bloomberg
  • Personal banking revenue rose 18% year over year, reflecting higher interest rates.
  • Fixed income markets revenue climbed 4% year over year, though that was offset by declines in investment banking and equity market revenue.

Citigroup reported rising net income and better-than-expected revenue for the first quarter, boosting its stock Friday.

Here is how Citigroup's key metrics compared with expectations.

  • $4.6 billion in net income vs. $4.3 billion in the same period last year
  • $21.45 billion in revenue vs. $19.99 billion expected, according to Refinitiv.

Citigroup reported earnings of $2.19 per share for the quarter. It was not clear how comparable that number is to estimates, but it appeared to be a solid beat, based on both GAAP and adjusted earnings per share.

Shares of the bank rose about 3% in morning trading.

Personal banking revenue rose 18% year over year, reflecting higher interest rates. Fixed income markets revenue rose 4% year over year, though that was offset by declines in investment banking and equity market revenue.

One key area for investors is how Citi adjusts its buffer for loan losses given the uncertain outlook for the economy. Citigroup reported a total provision for loan losses of $1.98 billion, slightly above the $1.89 billion provision for credit losses expected by analysts, according to StreetAccount, and up 7% from the prior quarter.

The bank's deposit flows are likely to be a key topic on management's earnings call with shareholders and analysts scheduled for 11 a.m. ET. After the failure of Silicon Valley Bank and Signature Bank last month, many expect that the largest banks will attract deposits from customers who pulled their money out of regional banks.

Citigroup reported that its deposits at the end of March were down 3% quarter over quarter.

"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," CEO Jane Fraser said in a statement.

Investors will also be looking for more information about Fraser's turnaround plan. Fraser took over Citigroup in 2021, and her efforts so far have included exiting the retail banking business in some overseas markets.

Citigroup closed two of those divestitures during the first quarter, including its consumer business in India that generated a gain on the sale. Net income was down 19% year over year when excluding the impact of the sales.

Revenue rose 12% year over year, and 6% when excluding the impact of those sales.

As of Thursday, Citigroup's stock was up more than 4% year to date, outperforming key peers including JPMorgan Chase and Bank of America.

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