- Personal banking revenue rose 18% year over year, reflecting higher interest rates.
- Fixed income markets revenue climbed 4% year over year, though that was offset by declines in investment banking and equity market revenue.
- CEO Jane Fraser said the bank saw a "notable softening" in consumer spending over the course of the quarter.
Citigroup reported rising net income and better-than-expected revenue for the first quarter, boosting its stock Friday even as the bank's executives expressed caution about the path of the U.S. economy.
Here is how Citigroup's key metrics compared with expectations.
- $4.6 billion in net income vs. $4.3 billion in the same period last year
- $21.45 billion in revenue vs. $19.99 billion expected, according to Refinitiv.
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Citigroup reported earnings of $2.19 per share for the quarter. It was not clear how comparable that number is to estimates, but it appeared to be a solid beat, based on both GAAP and adjusted earnings per share.
Shares of the bank rose about 4.8%.
The results were fueled in part by personal banking revenue rising 18% year over year, reflecting higher interest rates. Fixed income markets revenue rose 4% year over year, though that was offset by declines in investment banking and equity market revenue.
One key area for investors is how Citi adjusts its buffer for loan losses given the uncertain outlook for the economy. Citigroup reported a total provision for loan losses of $1.98 billion, slightly above the $1.89 billion provision for credit losses expected by analysts, according to StreetAccount, and up 7% from the prior quarter.
The outlook for the economy has been muddled by the failure of Silicon Valley Bank and Signature Bank last month, which could potentially slow loan growth throughout the economy.
"We are in a strong position to navigate whatever environment we face, which is particularly relevant given the degree of uncertainty today. ... We expect the recent events to be disinflationary and credit to contract. We believe it is now more likely that the U.S. will enter into a shallow recession later this year," Citigroup CEO Jane Fraser said on an investor call.
The CEO added that Citi saw a "notable softening" in consumer spending over the course of the quarter.
The bank kept its full-year guidance the same despite the strong first quarter, and CFO Mark Mason cited the uncertainty around the economy and the path of interest rates as the reason.
Citigroup reported that its deposits at the end of March were down 3% quarter over quarter to $1.33 trillion, but Mason said on the investor call that the bank did see about $30 billion of deposit inflows over the last three weeks of March. After the collapse of the two regional banks, many analysts expected the larger U.S. banks to see deposit inflows.
Fraser said she feels "very comfortable" with the diversity of Citi's deposit base.
As part of a broader restructuring plan away from international retail banking, Citigroup closed two divestitures during the first quarter, including its consumer business in India that generated a gain on the sale. Net income was down 19% year over year when excluding the impact of the sales.
Revenue rose 12% year over year, and 6% when excluding the impact of those sales.
Fraser, who has spearheaded the sales since taking over as CEO in 2021, said Friday that the bank will exit its remaining retail markets in Asia later this year.
Entering Friday, Citigroup's stock was up more than 4% year to date, outperforming key peers including JPMorgan Chase and Bank of America. Shares of JPMorgan rose more than 7% on Friday following its quarterly report.