Citigroup's 1Q profit climbs 3 percent

NEW YORK - Citigroup Inc., the nation's largest financial institution, said Friday that first-quarter earnings rose 3 percent from a year ago, helped by growth in retail banking as well as corporate and investment banking.



Net income totaled $5.44 billion, or $1.04 per share, in the January-March period, up from $5.27 billion, or $1.01 per share, a year earlier.



Revenue climbed 6 percent to $21.5 billion in the first quarter from $20.3 billion a year ago, driven by retail banking, fixed income markets and transaction services.



Analysts surveyed by Thomson Financial were looking for the company to report profit of $1.02 per share on sales of $22.73 billion in the latest quarter.



In addition, Citigroup's board authorized up to $15 billion in additional share repurchases, boosting the company's total authorization to $16.3 billion, the bank said.



Chief Executive Officer Charles Prince said in a statement accompanying the report that the quarterly results set another record.



"As we have seen in prior quarters, weakness in certain products or regions was more than offset by strength in others," Prince said. "We achieved strong growth in customer balances, which helped to offset the impact of spread compression from rising short-term rates. Our fixed income and transactions services businesses performed exceptionally."



He also said that Citigroup, which is based in New York, had "significantly strengthened our capital ratios" over the past nine months and had put in place a new ethics policy aimed at avoiding the regulatory run-ins that the bank has experienced in recent years.



Citigroup said that its first-quarter results included a $272 million charge for repositioning costs, a $109 million loss on the sale of manufactured housing loans, a $111 million gain on the sale of a transportation finance business and a $72 million gain related to the resolution of litigation involving Golden State Bancorp.



Revenue growth in retail banking as well as corporate and investment banking offset declines in global wealth management and asset management, the bank said. Citigroup blamed the drop in wealth management revenue to "reduced client transaction volumes and the wind-down of the Japan private bank," which Citigroup was ordered to close by Japanese regulators last year.



It said that revenue from its North American cards division was down 5 percent because of narrower interest margins and higher repayment rates.



Income from continuing operations totaled $5.17 billion, or 99 cents a share, up 3 percent from $5.02 billion, or 96 cents a share, a year earlier. These figures exclude the results of its Life Insurance and Annuities and Argentine pension business, which are being sold.