Updated from 9:20 a.m. EDT
NEW YORK (
beat analyst expectations by a penny reporting first-quarter earnings of $3 billion, or 10 cents a share.
A survey of analysts polled by
expected the bank to earn 9 cents a share. Citigroup reported net income of $4.4 billion, or 15 cents a share, a year earlier.
"Today's results are the fifth consecutive quarter of profitability. First quarter showed the continuing execution of our strategy," said Citigroup Chief Financial Officer John Gerspach on a conference call Monday. Gerspach said the bank hopes to begin
Citigroup revenue in the first quarter was $19.7 billion, 22% below revenue of $25.4 billion a year earlier. The year-over-year decline was due to lower revenue in fixed income markets and regional consumer banking, and securities and banking revenue.
its first-quarter earnings performance by releasing $3.3 billion in credit reserves. Citigroup also got a boost from its
Revenue from international banking was $4.6 billion was 8 percent higher than in the first quarter of 2010, while North American regional consumer banking revenue of $3.3 billion was down from $3.8 billion in the first quarter of 2010.
In addition, Citigroup's expenses increased to $12.3 billion from higher legal and related costs, and the impact of foreign exchange and investment spending, partially offset by a decline in Citi Holdings.
Some of the expenses included repurchase reserves of $122 million that the bank built up to repurchase loans from the GSEs, according to Gerspach. Unlike
Bank of America
that took larger mortgage servicing charges, Citigroup said it would wait until regulators decide if there would be a cash penalty and gradually apply those toward the balance sheets.
Gerspach said that the cash penalty could be a one-time charge of $40 million to $50 million that will drag over a couple of quarters. Overall, the repurchase reserve losses could have a $25 million to $30 million annual impact as Citigroup enhances its mortgage business, Gerspach said on the call. The bank is currently hiring a consultant for foreclosures and is also in the process of hiring 500 mortgage banking staff.
from last year to $3.3 billion
"Citi Holdings losses continued to decrease; we are investing in our core businesses in Citicorp; our capital strength improved; and the mix of revenues reflects the diversity of our businesses and our depth in both the emerging and developed markets," said Vikram Pandit, CEO of Citigroup, in a press release Monday.
Citigroup was rising 6 cents tp $4.48 on Monday.
--Written by Maria Woehr in New York.
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