NEW YORK (AP) ? Citigroup beat analysts' estimates for first-quarter earnings and revenue, and the bank's stock rose in pre-market trading. Citi's investment banking business jumped and the bank also released funds it had set aside for bad loans.
Citigroup bank made $4 billion, up 17 percent from a year ago, after stripping out the effects of an accounting charge. That amounted to $1.29 per share, beating the $1.17 that analysts polled by FactSet were expecting.
Revenue was $20.8 billion after stripping out the accounting charge, up 3 percent from a year ago. That also beat the $20.2 billion that analysts had expected.
Investment banking revenue there jumped 31 percent, the bank reported Monday, while revenue from consumer banking was flat. Citi's investment banking unit advised more companies on mergers and acquisitions and underwrote more stock and bond offerings. In the consumer bank, credit card revenue inched down.
Citi Holdings, the unit where the bank has shuttled troubled assets related to the financial crisis, lost less than in the same period a year ago. Citi Holdings lost $789 million, compared with more than $1 billion a year ago.
The bank also continued to release money it had set aside for bad loans, including releasing reserves from Citi Holdings' North American mortgage portfolio for the first time. Its total allowance for loan losses is now $23.7 billion, or 3.7 percent of total loans, compared to $29 billion, or 4.5 percent of total loans, a year ago.
Citi also benefited from a deferred tax credit. When companies have big losses, they get a break on taxes. Citigroup, which suffered big losses in 2008, was allowed to hold onto tax credits to use in the future, in years when it was profitable.
CEO Mike Corbat highlighted the bank's improving capital levels and the reduced "drag" from Citi Holdings.
It was Citi's first full quarter under Corbat, who took over last fall. Former CEO Vikram Pandit stepped down under pressure from a board that was unhappy with his efforts to turn around the bank. Corbat is now under pressure to turn around a bank that his predecessor couldn't.
Corbat called the bank's first quarter results encouraging, but he sounded more cautious about the economy than his peers at JPMorgan and Wells Fargo did when they reported earnings Friday.
"The environment remains challenging," Corbat said in a prepared statement, "and we are sure to be tested as we go through the year."
Citi's stock rose 2 percent to $45.83 in pre-market trading even while stock index futures were down.
Source: http://news.yahoo.com/citigroup-beats-earnings-revenue-stock-rises-121744542--finance.html
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