Citigroup (NYSE: C) announced Monday that it swung to a profit in the first quarter, earning $4.4 billion or 15 cents a share, compared to a loss of $696 million in the same period a year earlier.
The quarterly profit was the bank’s best since the second quarter of 2007 and was driven by shrinking credit costs and improving revenue.
Revenue for the quarter hit $25.4 billion, up $7.5 billion from the same period a year ago. The results easily topped analyst estimates for a breakeven quarter on revenue of $20.8 billion.
“We are proud of our first quarter results but remain cautious about the environment, given the uncertain economic recovery and high unemployment in the U.S. Realistically, we do not
expect our performance to follow an invariable trend-line upward. Longer-term, however, the prospects for Citi are clear and bright. And our first quarter of this year has given us the best
glimpse yet of the potential of ‘America’s global bank’,” said CEO Vikram Pandit.
agreement with the government.
“All of us at Citi recognize that we would not be where we are without the assistance of American taxpayers. We are gratified that Citi has been able to repay their TARP investment in our
company, with a substantial return, as well as create a significant increase in the value of their equity in Citi,” added Pandit.
Similar to its industry peers, such as JP Morgan (NYSE: JPM) and Bank of America (NYSE: BAC), Citigroup reported a smaller provision for loan losses in the first quarter compared to a year ago.
The bank took a $8.6 billion provision in the period.
Credit losses fell on a whole, totaling $8.4 billion in the first quarter, a $1.6 billion drop from last year. The decline also marks the third consecutive drop in quarterly credit losses.
The bank was also able to reign in expenses, cutting costs by $796 million to $11.5 billion. The bulk of the cost savings came from the bank’s Citicorp unit where expenses dropped $8.5 billion
in the quarter.
