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Citigroup's first-quarter net income declines by 2 per cent

Citicorp and Citi Holdings revenues decline.


The financial services provider Citigroup has reported a net income of $2.93bn, or $0.95 per diluted share, for the first quarter of 2012 – a decrease of 2 per cent compared to $3bn, or $0.99 per diluted share, for the same period last year.

The third-biggest US bank reported total revenues (net of interest expense) of $19.41bn, down from $19.73bn last year.

Citicorp revenues of $18bn in the first quarter of 2012 included a negative $1.4bn of credit valuation adjustments (CVA) and debt valuation adjustments (DVA). Net income decreased 3 per cent over the prior year to $4.3bn.

Excluding CVA/DVA, Citi Holdings revenues were $786m, 53 per cent lower than the first quarter 2011. Total Citi Holdings assets declined $86bn, or 29 per cent, from the first quarter 2011, to $209bn. Citi Holdings assets at the end of the first quarter represented approximately 11 per cent of total Citigroup assets.

Securities and banking revenues declined 12 per cent from the prior year period to $5.3bn, while equity markets revenues of $902m were 18 per cent below the prior year period.

Investment banking revenues grew 2 per cent to $865m, while lending revenues declined 78 per cent to $56m.

Private bank revenues increased 11 per cent to $570m, while transaction services revenues were $2.7bn, up 7 per cent. Corporate and other revenues increased $561m year on year to $500m.

Vikram Pandit, CEO of Citi, said: “While our businesses operated in an improved environment, we also saw the benefit of our investments. We generated revenue growth and had positive operating leverage across all three of Citi’s core businesses. Global consumer banking, our largest business, produced another quarter of good growth in revenues, net income and key drivers like loans and deposits. Transaction Services had record quarterly revenues as it captured increasing share in global trade finance, and securities and banking rebounded strongly with year-over-year revenue growth excluding the impact of CVA/DVA.”

Pandit added: “We continued to wind down our Citi Holdings legacy portfolio, which now stands at 11 per cent of our total assets, while further building capital. With a tier 1 common ratio of 12.4 per cent under Basel I and an estimated tier 1 common ratio of 7.2 per cent under Basel III, we continue to be one of the best-capitalised banks in the world.

“While the operating environment improved in the first quarter, there is still much macro uncertainty and we will continue to manage risk carefully. We will continue to leverage the depth and the scale of our global presence to serve our clients and grow our businesses,” concluded Pandit.