Citigroup Inc reported a better-than-expected 17 percent jump in quarterly profit, boosted by strong fixed-income trading as clients adjusted their positions following rate hikes by the Federal Reserve and changes in the forex and credit markets.
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The fourth-biggest U.S. bank by assets said on Thursday that net income rose to $4.09 billion, or $1.35 per share, in the first quarter ended March 31, from $3.50 billion, or $1.10 per share, a year earlier.
The company said the latest quarter's results included a net benefit of 8 cents per share from a few previously announced divestitures.
Analysts on average had expected earnings of $1.24 per share, according to Thomson Reuters I/B/E/S.
JPMorgan Chase & Co, the biggest U.S. bank by assets, earlier reported a higher-than-expected 16.8 percent rise in quarterly profit, helped by additional revenue from increased trading.
Citigroup's total revenue rose about 3 percent to $18.12 billion, beating the average analysts' estimate of $17.76 billion.
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Revenue from fixed-income trading rose 19 percent to $3.62 billion, while the bank's much smaller equities trading saw revenue increase 10 percent to $769 million.
Combined, trading revenue jumped about 17 percent, higher than the "low double-digit" rise that Chief Financial Officer John Gerspach projected five weeks ago.
Loans at the end of the period were up only 2 percent, from a year earlier.
"The momentum we saw across many of our businesses towards the end of last year carried into the first quarter, resulting in significantly better overall performance than a year ago," Chief Executive Michael Corbat said in a statement.
Operating expenses were little changed at $10.48 billion.
The ratio of expenses to revenue was about 58 percent, in line with the company's goal for this year.
Tangible book value per share was $65.94 at the end of March, compared with $64.57 three months earlier and $62.58 a year earlier.
Citigroup's shares were up marginally at $58.65 in premarket trading.
Through Wednesday's close, the stock had risen about 17 percent since the U.S. presidential elections, but is down 1.6 percent so far this year.
The elections sparked a rally in U.S. bank stocks as investors bet on lower taxes and easing regulations. But, the rally is losing momentum as investors scale back expectations for any quick changes. (Reporting by Sweta Singh in Bengaluru and David Henry in New York; Editing by Sriraj Kalluvila)