Citi net up 30% on investment banking
Citigroup Inc said on Monday its first-quarter profit jumped 30%, a stronger-than-expected increase, as the No. 3 US bank generated more money from underwriting stock issues and advising companies on mergers.business Updated: Apr 16, 2013 22:18 IST
Citigroup Inc said on Monday its first-quarter profit jumped 30%, a stronger-than-expected increase, as the No. 3 US bank generated more money from underwriting stock issues and advising companies on mergers.
Citigroup shares closed 0.2% higher after the results, which provided more evidence that a long-awaited turnaround might be under way at the bank six months after its board pushed out Vikram Pandit as chief executive and handed the reins to Michael Corbat.
Investors were encouraged by signs the bank was keeping a lid on expenses while bolstering revenue and reducing losses on bad assets. The bank’s shares have risen more than 80% since last June, in part because of the improving economy and partly because of its own efforts to get its house in order.
“Citigroup has been so messed up for so many years, there’s an opportunity for them,” said Mark Mandell, portfolio manager at Dalton Investments, which owns Citigroup shares. “All they have to do is a get a little better and they can get back to a valuation ncome rose to $3.81 billion, or $1.23 a share, from $2.93 billion, or 95 cents a share, a year earlier. Excluding accounting adjustments, earnings were $4.01 billion, or $1.29 a share, up from $3.42 billion, or $1.11 a share, a year earlier.
Profitability of its lending, known as its net interest margin, came in at 2.94% in the first quarter, up marginally from 2.93% in the fourth quarter.
Revenue rose 6% to $20.49 billion, while expenses came in at $12.40 billion, a bit higher than a year earlier, but down 10% from the 2012 fourth quarter, when Citigroup was saddled with new legal costs form related to consumer banking.