Citigroup’s first-quarter earnings beat Wall Street expectations as it earned more from borrowers, who pay higher interest rates on loans.
While its net interest income rose 23% to $13.3 billion, Citi also set aside $241 million to cover possible loan losses, up from $138 million a year ago, according to published results. Friday.
Citi earned $1.86 a share in the first quarter, beating the average analyst estimate of $1.67, according to Refinitiv data.
Net income increased 7% to $4.6 billion, or $2.19 per share, in the three months to March 31 from $4.3 billion, or $2.02 per share, in the last year.
The bank expects more clients to fail in the coming quarters as a mild recession looms in the second half of the year, Chief Financial Officer Mark Mason said.
Late credit card payments are on the rise but are still below pre-pandemic levels, Mason added.
Citi’s deposits were about unchanged at $1.33 trillion from the previous quarter and year as investors moved their money into money market funds in search of higher yields. But Mason said the bank saw an increase in deposits in March, mostly from businesses.
Thomas Hayes, chairman and chief executive officer of Great Hill Capital, said Citi posted the weakest growth of the three major banks reporting results on Friday but still beat expectations and managed to repurchase $1 billion of stock.
The bank’s investment in corporate services led to 31% revenue growth from treasury and trading solutions.
Mason expressed cautious optimism about a turnaround in investment banking. The division’s revenue fell 25% year over year, weighed down by the slowest commercial market in more than a decade.
Source: Terra
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