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 mentioned it was shuttering retail banking operations in 13 international locations throughout Asia and components of Europe to focus extra on wealth administration outside the U.S., one in every of the first huge strategic strikes made by CEO Jane Fraser, who took over in February.
Shares of the financial institution have been down lower than 1% after climbing 3.1% in 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.Three billion topped the $18.eight billion estimate.
Citigroup mentioned it had launched $3.9 billion in loan-loss reserves in the quarter, which resulted in a $2.06 billion acquire after $1.75 billion in credit score losses in the interval. Analysts had anticipated a $393.Four million provision in 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 mentioned.
Fraser, who is reporting outcomes for the first quarter at 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 shopper 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. shopper banking operations on Singapore, Hong Kong, the UAE and London — locations with an excellent focus of wealth, based on Fraser.
“As a results of the ongoing refresh of our technique, we have now determined that we’re going to double down on wealth,” Fraser mentioned in the launch. The transfer to focus on the remaining markets “positions us to seize the robust progress and engaging returns the wealth administration enterprise presents by means of these necessary hubs.”
Citigroup lacked the scale to correctly compete in the 13 markets it is leaving, she mentioned. Investment banking operations will proceed in markets the place the agency is exiting shopper operations, the financial institution mentioned.
Analysts might 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 danger 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% up to now this yr, 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 yr precedent days, based on Refinitiv.
Revenue: $18.eight billion, 9.2% decrease than a yr earlier.
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