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Citigroup Inc.’s (C - Free Report) first-quarter 2024 net income from continuing operations per share of $1.58 surpassed the Zacks Consensus Estimate of $1.13. However, the metric declined 28% from the year-ago quarter.
Shares of C have gained 1.8% in the pre-market trading on a higher-than-expected quarterly performance.
However, it witnessed declines in total loans and deposits in the quarter. Also, a decline in revenues and deteriorating credit quality are near-term woes.
Net income for the quarter was $3.37 billion, down 27% from the prior-year quarter.
Revenues Decline, Expenses Increase
Revenues, net of interest expenses, moved down 2% year over year to $21.1 billion in the first quarter. The top line missed the Zacks Consensus Estimate of $20.3 billion.
In the Services segment, total revenues, net of interest expenses, were $4.76 billion in the reported quarter, up 8% year over year. We suggested the metric to be $4.92 billion.
The Markets segment’s revenues decreased 7% year over year to $5.37 billion. We suggested the metric to be $5.06 billion.
Banking revenues of $1.71 billion moved up 49% year over year. We suggested the metric to be $1.39 billion.
U.S. Personal Banking’s revenues were $5.17 billion, increasing 10% from the prior-year quarter. We suggested the metric to be $5.22 billion.
In the Wealth segment, revenues were $1.69 billion in the reported quarter, down 4% year over year. We suggested the metric to be $2.05 billion.
Revenues in the All Other segment decreased 9% year over year to $2.38 billion.
Citigroup’s operating expenses increased 7% year over year to $14.19 billion. We suggested the metric to be $14.29 billion.
Balance Sheet Position Weak
At the end of the first quarter, Citigroup’s deposits were down marginally from the prior quarter to $1.30 trillion. The company’s loans declined 2% to $674.6 billion.
Credit Quality Improves
Total non-accrual loans rose 6% year over year to $2.77 billion. Also, C’s provisions for credit losses and for benefits and claims for the first quarter were $2.36 billion, up 20% from the year-earlier quarter.
Nonetheless, the allowance for credit losses on loans was $18.30 billion, down 7% from the prior-year quarter.
Capital Position Mixed
At the end of the first quarter, the bank’s Common Equity Tier 1 capital ratio was 13.5%, up from 13.44% in first-quarter 2023. However, the company’s supplementary leverage ratio in the reported quarter was 5.8% compared with 5.96% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1.5 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
The company’s results have been affected by higher provisions. Nonetheless, the business transformation initiatives, including its consumer business exits and organizational simplification efforts, will help it in the long run. Focus on growth in the profitable business while eliminating non-viable segments will likely aid results in the long run.
Due to transformation expenses and business-led investments, expenses have likely flared up in the quarter, impeding bottom-line growth.
Image: Bigstock
Citigroup (C) Q1 Earnings Beat Estimates, Revenues Decline Y/Y
Citigroup Inc.’s (C - Free Report) first-quarter 2024 net income from continuing operations per share of $1.58 surpassed the Zacks Consensus Estimate of $1.13. However, the metric declined 28% from the year-ago quarter.
Shares of C have gained 1.8% in the pre-market trading on a higher-than-expected quarterly performance.
However, it witnessed declines in total loans and deposits in the quarter. Also, a decline in revenues and deteriorating credit quality are near-term woes.
Net income for the quarter was $3.37 billion, down 27% from the prior-year quarter.
Revenues Decline, Expenses Increase
Revenues, net of interest expenses, moved down 2% year over year to $21.1 billion in the first quarter. The top line missed the Zacks Consensus Estimate of $20.3 billion.
In the Services segment, total revenues, net of interest expenses, were $4.76 billion in the reported quarter, up 8% year over year. We suggested the metric to be $4.92 billion.
The Markets segment’s revenues decreased 7% year over year to $5.37 billion. We suggested the metric to be $5.06 billion.
Banking revenues of $1.71 billion moved up 49% year over year. We suggested the metric to be $1.39 billion.
U.S. Personal Banking’s revenues were $5.17 billion, increasing 10% from the prior-year quarter. We suggested the metric to be $5.22 billion.
In the Wealth segment, revenues were $1.69 billion in the reported quarter, down 4% year over year. We suggested the metric to be $2.05 billion.
Revenues in the All Other segment decreased 9% year over year to $2.38 billion.
Citigroup’s operating expenses increased 7% year over year to $14.19 billion. We suggested the metric to be $14.29 billion.
Balance Sheet Position Weak
At the end of the first quarter, Citigroup’s deposits were down marginally from the prior quarter to $1.30 trillion. The company’s loans declined 2% to $674.6 billion.
Credit Quality Improves
Total non-accrual loans rose 6% year over year to $2.77 billion. Also, C’s provisions for credit losses and for benefits and claims for the first quarter were $2.36 billion, up 20% from the year-earlier quarter.
Nonetheless, the allowance for credit losses on loans was $18.30 billion, down 7% from the prior-year quarter.
Capital Position Mixed
At the end of the first quarter, the bank’s Common Equity Tier 1 capital ratio was 13.5%, up from 13.44% in first-quarter 2023. However, the company’s supplementary leverage ratio in the reported quarter was 5.8% compared with 5.96% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1.5 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
The company’s results have been affected by higher provisions. Nonetheless, the business transformation initiatives, including its consumer business exits and organizational simplification efforts, will help it in the long run. Focus on growth in the profitable business while eliminating non-viable segments will likely aid results in the long run.
Due to transformation expenses and business-led investments, expenses have likely flared up in the quarter, impeding bottom-line growth.
Citigroup Inc. Price, Consensus and EPS Surprise
Citigroup Inc. price-consensus-eps-surprise-chart | Citigroup Inc. Quote
At present, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Banks
Bank OZK (OZK - Free Report) is slated to report first-quarter 2024 results on Apr 17.
Over the past month, the Zacks Consensus Estimate for OZK’s quarterly earnings per share has been unchanged at $1.44.
First Horizon Corp. (FHN - Free Report) is scheduled to release first-quarter 2024 earnings on Apr 17.
The consensus estimate for FHN’s quarterly earnings has been unchanged at 34 cents over the past 30 days.