Citigroup Inc. (NYSE:C), the third largest retail bank in the U.S., beat market estimates and reported a 30% increase in profit for the first quarter of 2013, supported by transactions in bonds and the investment activity.
Net income for the first quarter was $3.81 billion or $1.23 a share, compared with $2.93 billion or 95 cents a share in the same period of last year. Excluding accounting adjustments, profit was $4 billion or $1.29 per share, compared to $3.4 billion a year earlier. Revenue was up by 3% to $20.49 billion.
Analysts surveyed by Bloomberg on average estimated a gain of $1.17 per share.
CEO Michael Corbat, aged 52, who oversaw his first full quarter at the helm of Citigroup since replacing Vikram Pandit in October 2012, laid off employees and closed offices in an effort to improve Citigroup’s bottom line. Bond trading and investment banking revenues were accompanied by a decrease in reserves for bad loans.
“Achieving consistent, high-quality earnings is one of my top priorities, and these results are encouraging. It is critical that Citi be viewed as an indisputably strong and stable institution. And we made progress toward that goal,” said Michael Corbat in a call with analysts. He added: “the environment remains challenging and we are sure to be tested as we go through the year.” Reflecting on the global economy, Corbat said: “Growth rates in the emerging markets are around 5 percent, growth rates in the developed market space around 1 percent. And you can see the volatility in reactions, whether it’s to slowing growth in China this morning or whether it was Cyprus issues. I think the world continues to be somewhat of a fragile place and I expect the markets to remain volatile.”
Bank earnings rose to $20.5 billion from $19.4 billion a year earlier. Excluding accounting adjustments, revenues were $20.8 billion over the average estimates of $20.2 billion from analysts surveyed by Bloomberg.
Thanks to these results, shares of Citigroup reported a 2.2% increase before the opening of the trading day on Wall Street, to $45.72 per share, compared with Friday’s closing of $44.72 per share. By the end of the trading session, the shares went back to $44.87.
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