Citigroup Navigates Mixed Q1 Results, Beats EPS Estimates Amid Revenue Decline

📝 SUMMARY: Citigroup Inc. ($C) reported a mixed financial performance for the first quarter of 2024, achieving an earnings per share (EPS) of $1.58, which exceeded the Zacks Consensus Estimate of $1.13. However, this figure represents a significant 28% decline from the same quarter last year, underscoring ongoing challenges within the banking sector. The company’s net income also fell to $3.37 billion, down 27% year-over-year.

The bank's revenue net of interest expenses dipped 2% to $21.1 billion, missing the anticipated $20.3 billion. This decline was attributed to mixed results across its various segments. The Services segment saw an 8% increase in revenue, while the Markets segment experienced a 7% decline. Banking revenues notably surged by 49%, and U.S. Personal Banking revenues grew by 10%. However, the Wealth segment's revenues decreased by 4%, reflecting broader sector volatility.

Citigroup’s operational costs escalated by 7% to $14.19 billion, partly due to ongoing business transformation initiatives, which include exiting non-core consumer businesses and simplifying organizational structures. These strategic moves are expected to streamline operations and improve long-term profitability, despite immediate financial pressures.

The bank's balance sheet showed signs of strain, with a slight decrease in deposits and a 2% reduction in loans. Credit quality presented a mixed picture; non-accrual loans increased by 6%, but the overall allowance for credit losses on loans decreased by 7%.

Despite these challenges, Citigroup maintained a robust capital return policy, distributing $1.5 billion to shareholders through dividends and share repurchases. As the bank continues its transformation, it remains focused on optimizing its business model to navigate an uncertain financial landscape effectively. This strategy is intended to stabilize its financial footing and position the company for sustainable growth in the coming years.

🔍 SOURCE: https://finance.yahoo.com/news/citigroup-c-q1-earnings-beat-144400095.html