Citigroup (C) posted its first-quarter results on Friday. It beat analysts’ estimates in both earnings and revenue. Although profit fell from a year earlier and revenue declined, revenue in the investment banking and Services division helped the major American bank post better results than Wall Street expected. CWEB analysts reviewed the quarterly report and think Citigroup’s stock price will rise.
Citigroup reported earnings at $1.86 per share adjusted, while analysts’ expectations were $1.23. Posted revenue was $21.10 billion, while analysts’ expectations, according to LSEG, formerly Refinitiv, stood at $20.4. billion.
Profits fell in the quarter due to rising costs, as laid-off employees had to receive severance payments. The company also had to pay $251 million into a Federal Deposit Insurance Corp fund, which faced depletion after three large regional banks collapsed.
Citigroup Inc.’s stock has fared better than JP Morgan Chase and Wells Fargo after the release of its first-quarter report. CWEB analyzed the bank’s cost-cutting measures and 9 percent growth in noninterest income, suggesting that Citi will continue to grow as per its guidance of 11 percent growth and approximately $80 billion in revenue, which might exceed expectations.
Citi performed well against the S&P 500, down 0.6 percent, while the bank stock was up 1.6 percent.
CEO Jane Fraser has been reorganizing the bank, and growth has been seen in the investment banking and services businesses. These helped offset losses in markets and wealth management. Investment banking revenue rose by 35 percent to $903 million, while services gained 8 percent to $4.8 billion.
Citigroup has a positive outlook on the economy. Its Chief Financial Officer Mark Rowan considered a soft landing “increasingly likely” despite geopolitical uncertainties and described the global economy as “resilient.”
He also said central banks worldwide are likely to see inflation “moving in the direction” they want to see.
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