NEW YORK (AP) — Citigroup's profit fell nearly 27 percent in the first quarter, hurt by weak results at its consumer bank and trading business. But the company's earnings still beat Wall Street expectations.
The New York-based financial conglomerate quarter continued to clean up its balance sheet and slim itself down from the depths of the financial crisis. Citi Holdings, the so-called bad bank that holds most of Citi's toxic assets left over from the bubble years, posted its seventh straight quarterly profit. The value of Citi Holdings' investments fell 44 percent from a year earlier as the bank sold off complicated derivatives, bonds and other assets.
These efforts were part of the reason why Citi was the only large U.S. bank to pass the Federal Deposit Insurance Corporation and Federal Reserve's test for its "living will" earlier this week. Big banks were required to submit a plan to regulators to show they could be successfully unwound in the event of a bankruptcy or crisis. It's a victory for a bank that was once known for its complicated legal structure and balance sheet.
"Winding down Holdings has been a longtime goal and shows Citi's progress in becoming a simpler, smaller, safer and stronger institution," said Citi CEO Michael Corbat in a prepared statement.
Citi's trading operations were hit hard in the quarter though, just like its competitors Bank of America and JPMorgan Chase that reported earlier in the week. Revenues in Citi's markets and securities division fell 15 percent to $4.1 billion, with stock and bond trading revenue both falling double digits from a year earlier.
The bank was not immune from the downturn in oil prices either. Citi set aside $233 million to cover bad loans in the quarter, primarily due to souring energy loans.
Citi's global consumer banking division, which includes its U.S. Citibank operations as well as retail banking operations overseas, had net income of $1.2 billion in the quarter, down 28 percent from a year earlier.
Overall, Citi reported net income of $3.5 billion, or $1.10 per share, in the three months ending in March, compared with $4.77 billion, or $1.51 per share, a year ago.
The results beat the $1.03 per share analysts had expected, according to FactSet.
Revenue in the quarter fell 11 percent to $17.56 billion, beating the $17.44 billion that analysts expected.
Citigroup shares fell 10 cents, or 0.2 percent, to $44.88 in late-afternoon trading. Shares are down 13 percent this year.
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