Citigroup on Thursday posted outcomes that beat analysts’ estimates for first-quarter revenue with robust funding banking income and a bigger-than-expected launch of loan-loss reserves.
The agency additionally stated it was shuttering retail banking operations in 13 international locations throughout Asia and elements of Europe to focus extra on wealth administration exterior the U.S., one of many first large strategic strikes made by CEO Jane Fraser, who took over in February.
Shares of the financial institution had been down lower than 1% after climbing 3.1% within the premarket.
The financial institution reported revenue of $7.94 billion, or $3.62 a share, exceeding the $2.60 estimate of analysts surveyed by Refinitiv. Revenue of $19.3 billion topped the $18.8 billion estimate.
Citigroup stated it had launched $3.9 billion in loan-loss reserves within the quarter, which resulted in a $2.06 billion acquire after $1.75 billion in credit score losses within the interval. Analysts had anticipated a $393.4 million provision within the quarter.
The financial institution posted report income from funding banking and equities buying and selling, just like rival banks which have reported earlier. Citigroup equities buying and selling income of $1.48 billion exceeded analysts’ estimate by greater than $300 million, and glued revenue buying and selling income of $4.55 billion topped the estimate by roughly $100 million.
Investment banking income surged 46% to $1.97 billion, about $300 million greater than the estimate, on excessive exercise in fairness underwriting due to the increase in SPAC issuance, the agency stated.
Fraser, who’s reporting outcomes for the primary quarter on the helm of the nation’s third-biggest financial institution, wasted no time in making modifications to the agency’s sprawling world operations. The financial institution is exiting client operations in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.
The plan is to focus its non-U.S. client banking operations on Singapore, Hong Kong, the UAE and London — locations with an excellent focus of wealth, in keeping with Fraser.
“As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth,” Fraser stated within the launch. The transfer to give attention to the remaining markets “positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.”
Citigroup lacked the dimensions to correctly compete within the 13 markets it’s leaving, she stated. Investment banking operations will proceed in markets the place the agency is exiting client operations, the financial institution stated.
Analysts will likely be eager to listen to extra about Fraser’s final imaginative and prescient for the financial institution, in addition to particulars on her plan to appease regulators who’ve criticized the agency’s threat administration controls.
On Wednesday, JPMorgan Chase and Wells Fargo each posted outcomes that exceeded analysts’ expectations on reserve releases and powerful Wall Street income, whereas Goldman Sachs beat estimates on robust advisory and buying and selling outcomes. Earlier Thursday, Bank of America additionally reported that it beat estimates for causes just like its friends.
Shares of Citigroup have climbed 18% to date this 12 months, in contrast with the 26% advance of the KBW Bank Index.
Here’s what Wall Street anticipated:
Earnings: $2.60 a share, 147% greater than the 12 months precedent days, in keeping with Refinitiv.
Revenue: $18.8 billion, 9.2% decrease than a 12 months earlier.
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