Citigroup in 27% First Quarter Profits Plunge
Leading US bank Citigroup has reported a 27% decline in in the three months to the end of March compared with the same time year earlier.
The large fall makes it the biggest decline in profits amongst the big US banks that have delivered Q1 results so far. It also comes just weeks after Citigroup dropped from third to fourth biggest US bank according to assets, having been overtaken by Wells Fargo.
Citigroup saw net income decline to $3.5bn in the first quarter, a sharp fall from the $4.8bn this time a year earlier. Much of the bank’s revenue comes from fixed income markets which declined by 11.5% to $3.09bn, whilst investment banking revenue plummeted by 27.2% to $875m.
The sharp decline in the results was, however, better than economists were. Citigroup is currently restructuring to focus on more profitable businesses. It has also set aside more cash to cover losses on energy loans, whilst the cost of downsizing some of its businesses rose.
Chief executive Michael Corbat said that Citigroup was moving forward “in becoming a simpler, smaller, safer and stronger institution”.
So far this year, the banking industry worldwide has struggled because of fears surrounding the global economic outlook. The US has shown only tentative signs of a recovery, whilst China is experiencing slowing growth.
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