Reuters
- Citi's first quarter earnings beat analyst estimates for sales & trading revenue and EPS.
- The record profit came from SPAC activity that led a surge in underwriting fees.
- Citi also announced it will be pulling its consumer franchises in 13 international markets.
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Citigroup's first-quarter earnings report released on Thursday came in above analyst estimates, as SPAC activity led to a surge in underwriting fees and stock trading soared. Sales and trading revenue in the bank's fixed income, currencies and commodities (FICC) business also jumped.
Equities sales and trading revenue soared 46% from the same period last year, coming in at $1.48 billion versus the average estimate of $1.12 billion. Meanwhile fixed income, currency, and commodity sales and trading revenue came in at $4.55 billion, down 5% year over year and beating analyst estimates of $4.36 billion.
Shares of Citigroup rose nearly 3% in premarket trading following the results.
Here are other key numbers:
Revenue: $19.3 billion, versus the average analyst estimate of $18.82 billion
Adjusted earnings per share: $3.62 per share, versus the average analyst estimate of $2.60
Net Income: $7.2 billion
In the same quarter last year, Citigroup reported EPS of $1.06 on revenue of $20.73 billion.
This quarter marked Citi's first with CEO Jane Fraser at the helm.
"It's been a better than expected start to the year, and we are optimistic about the macro environment," she said in the earnings release.
Fraser also said Citi plans "double down on wealth" and operate its consumer banking franchise in Asia and the EMEA region solely from four wealth centers in Singapore, Hong Kong, the UAE, and London. As a result, it will be pulling its consumer franchises in 13 markets across Asia, Europe, the Middle East, and Africa. Australia, Korea, Russia, China, and India are among the regions affected.
"While the other 13 markets have excellent businesses, we don't have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia," Fraser said.
Citigroup's earnings come amid a blockbuster week for bank earnings. On Wednesday, Goldman Sachs beat revenue and profit expectations on strong trading and investment banking revenue. JP Morgan Chase and Wells Fargo also turned in profit that surpassed Wall Street's targets.