Citigroup profit jumps 42% on trading revenue surge

Citi Group $C posted a 42% jump in first-quarter profit, with earnings of $3.06 per share beating analysts’ estimates of $2.65 per share, the bank reported Tuesday. Revenue of $24.63 billion – the bank’s highest quarterly figure in a decade – also beat Wall Street expectations of $23.55 billion.

Geopolitical tensions that fueled volatility across asset classes helped push total market revenues up 19% year-on-year to $7.2 billion, Reuters reported. Equities brought in $2.1 billion, a 39% year-over-year gain, while the fixed income segment brought in $5.2 billion, up 13%. The prime balances of the markets division increased by more than 50%, Citi Group said.

Commodities drove a 27% gain in other fixed income categories, while rates and currencies contributed to a 6% gain. The growth in equity markets reflects the strength of derivatives, premium services and spot equities.

The banking division’s investment banking revenues increased by 15% in the quarter. On the underwriting side, equity fees jumped 64% and M&A advisory fees jumped 19%, although fixed income underwriting fell 6%. The services division recorded a 17% increase in revenue to $6.1 billion.

Citi GroupThe bank’s return on tangible equity stood at 13.1%, above the bank’s full-year target range of 10-11% and the highest since 2021. “We remain on track to achieve the RoTCE target of 10-11% this year,” CEO Jane Fraser said in a statement.

Fraser also said the bank repurchased $6.3 billion worth of shares during the quarter and added: “We have entered the final phase of our divestments and 90% of our transformation programs have now met or are close to our target.”

A 7% increase in expenses reflects the cost of ongoing workforce reductions, with compensation, benefits and severance all weighing on the bottom line. Citi Group continued its restructuring. At $2.81 billion, the allowance for credit losses exceeded the $2.64 billion forecast by analysts, with net consumer card credit losses and a $579 million provision both contributing to the deficit.

Over the past year, Citi Group shares gained about 104.9%, a rise that left behind both the KBW banking index and most of its big-bank peers, according to Reuters.