Citigroup Inc. (NYSE: C) reported its first-quarter financial results before the markets opened on Wednesday. The bank said that it had $1.05 in earnings per share (EPS) and $20.7 billion in revenue, while consensus estimates had called for $1.04 in EPS and $19.01 billion in revenue. The same period of last year reportedly had $1.87 in EPS and $18.58 billion in revenue.
During the latest quarter, revenues increased 12% from the prior-year period, primarily reflecting higher revenues in Fixed Income Markets and Equity Markets, as well as the benefit of mark-to-market gains on loan hedges in the corporate lending portfolio, all in the Institutional Clients Group. Net income declined 46% from the prior-year period, driven by higher loan loss reserves, reflecting the impact of changes in Citi’s economic outlook on estimated lifetime losses under the new Current Expected Credit Loss standard.
Book value per share increased 9% year over year to $83.75, and tangible book value per share increased 9% to $71.52.
Citigroup’s end-of-period loans were $721 billion as of quarter’s end, up 6% from last year. End-of-period deposits were $1.2 trillion, an increase of 15%.
In terms of its segments, the bank reported:
- Global Consumer Banking revenues increased 1% year over year to $8.17 billion.
- Institutional Clients Group revenues increased by 25% to $12.48 billion.
- Corporate / Other revenues decreased 84% to $73 million.
Michael Corbat, Citi CEO, commented:
Our earnings for the first quarter were significantly impacted by the COVID-19 pandemic. We managed our expenses with discipline and had good revenue performance as the economic shocks caused by the pandemic weren’t felt until late in the quarter. However, the deteriorating economic outlook and the transition to the new Current Expected Credit Loss standard (CECL) caused us to build significant loan loss reserves.
Note that the company issued no guidance. However, the consensus estimates are $1.06 in EPS and $17.88 billion in revenue for the second quarter.
Citigroup stock closed Tuesday at $45.42, in a 52-week range of $32.00 to $83.11. The consensus price target is $62.36. Following the announcement, the stock was down about 3% at $43.87 in early trading indications Wednesday.
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