Citigroup Inc. (NYSE: C) reported first-quarter 2015 results before markets opened Thursday. The investment bank and financial services giant reported adjusted diluted earnings per share (EPS) of $1.52 on revenue of $19.74 billion. In the same period a year ago, Citi reported EPS of $1.23 on revenue of $20.21 billion. First-quarter results also compare to the consensus estimates for EPS of $1.39 on revenue of $19.82 billion.

Net income rose 16%, excluding a credit valuation adjustment/debit valuation adjustment (CVA/DVA) and a tax item adjustment in the first quarter of 2014, primarily driven by lower operating expenses and lower net credit losses. The gain was partially offset by lower revenues and a reduced net loan loss reserve release.

Expenses dropped 10% year-over-year from $12.15 billion to $10.88 billion. Sequentially the bank’s expenses fell 25%. That performance accounted for the lion’s share of quarterly income, but cost-cutting is unlikely to be a long-term fix.

Citi’s allowance for loan losses totaled $14.6 billion at the end of the quarter, 2.38% of total loans, down from $18.9 billion a year ago (2.87% of the loan total). The net release of loan loss reserves totaled $239 million, compared with $673 million in the first quarter of 2014.

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Loans and deposits each fell 7% compared with last year. North American mortgage loans were down, and the bank reclassified $10 billion worth of loans to other assets pending the sale of OneMain Financial and Citi’s credit card operations in Japan.

Citi increased its Basel III Tier 1 common equity ratio from 10.5% to 11% in the first quarter. Its estimated Basel III supplementary leverage ratio rose from 5.7% to 6.4%. The bank also raised its tangible book value per share 2% to $57.66.

Investment banking revenues rose 14% and trading revenues fell 2%. Fixed income revenues were down 11%.

The bank’s CEO said:

While some businesses faced revenue headwinds, we grew loans and deposits in our core businesses and gained wallet share among our target clients. We tightly managed our expenses, helping to achieve positive operating leverage in Citicorp and we are on track to hit our financial targets for the year. … We were pleased that the Federal Reserve did not object to our capital plan so we can now begin meaningful capital return to our shareholders.

Citi raised its quarterly dividend from $0.01 to $0.05 following the Fed’s report and said it would initiate a $7.85 billion buyback program beginning in the second quarter of 2015.

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The bank did not offer guidance in its press release, but the consensus estimates call for second-quarter EPS of $1.33 on revenues of $19.56 billion. The EPS estimate for the 2015 fiscal year is now $5.37.

Shares traded about 1.6% higher in the premarket Thursday, at $54.07. The current 52-week range is $46.08 to $56.95. Thomson Reuters had a consensus analyst price target of around $61.70 before the results were announced.

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