Citi profit tops expectations, bond trading helps
By David Henry
(Reuters) - Citigroup Inc posted stronger-than-expected first-quarter results as bond trading and underwriting revenue jumped compared with the 2011 fourth quarter.
While the results were better than the company's report three months ago, profit fell 2 percent from a year earlier, reflecting the bank's difficulties as it works to boost its earnings in a sluggish global economy.
Chief Executive Vikram Pandit said the bank might not seek regulatory approval to return capital to shareholders this year after all. Citigroup received multiple bailouts during the credit crunch and was one of the few banks to have its capital return plans rejected by the Federal Reserve earlier this year.
First-quarter revenue, excluding accounting adjustments, was up 1 percent from a year earlier and 17 percent from the fourth quarter, to $20.2 billion. Investment banking revenue was hit particularly hard in North America and Europe.
Investors focused on the positives, and Citigroup's shares rose 74 cents, or 2.2 percent, at $34.15 in Monday afternoon trading.
"They continue to progress. They have headwinds that maybe only Bank of America has, but they seem to be managing those headwinds," said Gary Townsend, CEO of Hill-Townsend Capital. "It's a good quarter without being as superlative as JPMorgan's was."
JPMorgan Chase & Co topped Wall Street profit expectations on Friday, helped by some of the same macro trends - a better economy and more active capital markets.
But the KBW index of bank stocks is already up more than 20 percent this year, and investors are turning their attention to determining the strength and extent of the recovery, which still lags the optimism of early last year. Continued...