On Friday, Citigroup Inc. (NYSE: C) announced first quarter financial result. Stock price increased 1.37% to $45.60 on Friday morning trading.
The first quarter profit down 27% to $3.5 billion as two of its biggest growth areas, credit cards and stock trading, fail to help it weather a weak market environment. Revenue decreased 11% to $17.56 billion compared with $19.74 billion last year. Even though, Citigroup’s profit beat the $1.03 analysts’ expectation polled by Thomson Reuters, and revenue also surpassed the projected $17.46 billion.
Michael Corbat, Chief Executive Officer of Citi, said, “While our market-sensitive products clearly suffered from weak investor sentiment during the quarter, we continued to make progress in several key areas. We grew loans and deposits in our core businesses, reduced our expenses while absorbing a significant repositioning charge, utilized additional Deferred Tax Assets, and generated capital in excess of what we returned to our shareholders.”
In comparison, JPMorgan Chase & Co. (NYSE: JPM) reported an 11% decline in its trading business during the first quarter, while Bank of America Corp (NYSE: BAC) posted a 16% drop.
However, unlike other big banks, Citigroup has a smaller consumer banking business in the United States which is a sector that is proving to be one of the few true bright spots of the year in finance.
Citigroup has been revamping its credit card business by cash in the strong American consumer health. The bank’s investments in marketing the new credit card offerings, which may pay off in the future, have increased short-term expenses.
Moreover, Citigroup increased its reserves mostly to cushion against loan losses from oil and gas companies which are struggling in a bitter downturn in prices. That drove up the bank’s cost of credit by 7 percent, to about $2 billion.