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Citigroup (C) Q1 Earnings & Revenues Beat Estimates, Costs Up
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Citigroup Inc.’s (C - Free Report) first-quarter 2023 earnings per share (excluding divestiture-related impacts) of $1.86 have outpaced the Zacks Consensus Estimate of $1.66. Our estimate for earnings was $1.40 per share.
Citigroup witnessed revenue growth in the quarter, backed by higher revenues in the Institutional Clients Group, and Personal Banking and Wealth Management segments. However, the higher cost of credit was a spoilsport.
Net income for the quarter was $4.6 billion, increasing 7% from the prior-year quarter.
Revenues Rise, Expenses Increase
Revenues, net of interest expenses, moved up 12% year over year to $21.44 billion in the first quarter. The top line outpaced the Zacks Consensus Estimate of $17.91 billion. Our estimate for the metric was $18.9 billion.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $11.23 billion in the first quarter, up 1% year over year. Our estimate for the same was $10.32 billion.
The Personal Banking and Wealth Management segment’s revenues increased 9% year over year to $6.44 billion. Our estimate for the metric was $6.46 billion.
Legacy Franchises’ revenues of $2.85 billion moved up 48% year over year. Our estimate for the metric was $1.75 billion.
Corporate/Other’s revenues were $914 million, surging from the prior-year quarter’s $190 million.
Citigroup’s operating expenses increased 1% year over year to $13.28 billion.
Balance Sheet Position Deteriorates
At the end of the first quarter, Citigroup’s deposits were down 3% from the prior quarter to $1.33 trillion. The company’s loans decreased 1% to $652 billion.
Credit Quality Deteriorates
Total non-accrual loans declined 23% year over year to $2.6 billion.
However, Citigroup’s costs of credit for the first quarter were $1.97 billion compared with the $755 million recorded in the year-earlier quarter. Also, Citigroup’s total allowance for credit losses on loans was $17.2 billion at the end of the reported quarter compared with $15.4 billion in the year-ago period.
Capital Position Strong
At the end of the first quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13.4%, up from 11.4% in first-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was at 5.9%, rising year over year from 5.6%.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1 billion to shareholders in the form of common share dividends.
Our Viewpoint
Progressing with its global consumer banking exits, in first-quarter Citigroup announced the completion of the sale of its Vietnam retail banking and consumer credit card businesses to United Overseas Bank Limited or UOB.
Citigroup also closed the sale of its India consumer business to Axis Bank Limited during the reported quarter. The deal was announced in March 2022. The sale includes retail banking, credit cards, wealth management and consumer loans, as well as the transfer of around 3,200 Citi employees.
The transaction is anticipated to result in a regulatory capital release of $1.4 billion.
However, due to transformation expenses and business-led investments, expenses may flare up in the upcoming period, impeding bottom-line growth.
Webster Financial (WBS - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 20.
Over the past week, the Zacks Consensus Estimate for WBS’ quarterly earnings has moved marginally south to $1.56, implying a 25.8% rise from the prior-year reported number.
Texas Capital Bancshares (TCBI - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 20.
Over the past seven days, the Zacks Consensus Estimate for TCBI’s quarterly earnings has moved marginally upward to 89 cents, implying a 29% rise from the prior-year reported number.
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Citigroup (C) Q1 Earnings & Revenues Beat Estimates, Costs Up
Citigroup Inc.’s (C - Free Report) first-quarter 2023 earnings per share (excluding divestiture-related impacts) of $1.86 have outpaced the Zacks Consensus Estimate of $1.66. Our estimate for earnings was $1.40 per share.
Citigroup witnessed revenue growth in the quarter, backed by higher revenues in the Institutional Clients Group, and Personal Banking and Wealth Management segments. However, the higher cost of credit was a spoilsport.
Net income for the quarter was $4.6 billion, increasing 7% from the prior-year quarter.
Revenues Rise, Expenses Increase
Revenues, net of interest expenses, moved up 12% year over year to $21.44 billion in the first quarter. The top line outpaced the Zacks Consensus Estimate of $17.91 billion. Our estimate for the metric was $18.9 billion.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $11.23 billion in the first quarter, up 1% year over year. Our estimate for the same was $10.32 billion.
The Personal Banking and Wealth Management segment’s revenues increased 9% year over year to $6.44 billion. Our estimate for the metric was $6.46 billion.
Legacy Franchises’ revenues of $2.85 billion moved up 48% year over year. Our estimate for the metric was $1.75 billion.
Corporate/Other’s revenues were $914 million, surging from the prior-year quarter’s $190 million.
Citigroup’s operating expenses increased 1% year over year to $13.28 billion.
Balance Sheet Position Deteriorates
At the end of the first quarter, Citigroup’s deposits were down 3% from the prior quarter to $1.33 trillion. The company’s loans decreased 1% to $652 billion.
Credit Quality Deteriorates
Total non-accrual loans declined 23% year over year to $2.6 billion.
However, Citigroup’s costs of credit for the first quarter were $1.97 billion compared with the $755 million recorded in the year-earlier quarter. Also, Citigroup’s total allowance for credit losses on loans was $17.2 billion at the end of the reported quarter compared with $15.4 billion in the year-ago period.
Capital Position Strong
At the end of the first quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13.4%, up from 11.4% in first-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was at 5.9%, rising year over year from 5.6%.
Capital Deployment Solid
In the reported quarter, Citigroup returned $1 billion to shareholders in the form of common share dividends.
Our Viewpoint
Progressing with its global consumer banking exits, in first-quarter Citigroup announced the completion of the sale of its Vietnam retail banking and consumer credit card businesses to United Overseas Bank Limited or UOB.
Citigroup also closed the sale of its India consumer business to Axis Bank Limited during the reported quarter. The deal was announced in March 2022. The sale includes retail banking, credit cards, wealth management and consumer loans, as well as the transfer of around 3,200 Citi employees.
The transaction is anticipated to result in a regulatory capital release of $1.4 billion.
However, due to transformation expenses and business-led investments, expenses may flare up in the upcoming period, impeding bottom-line growth.
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
Webster Financial (WBS - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 20.
Over the past week, the Zacks Consensus Estimate for WBS’ quarterly earnings has moved marginally south to $1.56, implying a 25.8% rise from the prior-year reported number.
Texas Capital Bancshares (TCBI - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 20.
Over the past seven days, the Zacks Consensus Estimate for TCBI’s quarterly earnings has moved marginally upward to 89 cents, implying a 29% rise from the prior-year reported number.