Citigroup Beats Top and Bottom Line Estimates, Shares Rise

Citigroup C reported first quarter results that beat analyst estimates both on the top and bottom line. Following the news, shares rose over one percent in the pre-market.

For the first quarter of 2013, Citigroup reported adjusted earnings per share of $1.29 vs. estimates of $1.19, beating by $0.10 or 8.4 percent.

On the top line, Citigroup reported revenue of $20.5 billion, beating estimates of $20.1 billion and easing fears that revenue would be weak after competitors J.P. Morgan Chase JPM and Wells Fargo WFC both missed revenue estimates.

Also in the quarter, Citigroup reported that its net interest margin expanded to 2.94 percent, another positive compared to its peers who saw NIMs fall in the quarter. Citigroup also said that net credit losses declined 25 percent from the same period a year ago to $3.0 billion and also that loan loss reserve releases of $652 million were nearly half of what they were in the same period a year ago.

Citigroup's capital position was also stronger than its peers in the quarter, as its Basel I Tier 1 capital ratio was 11.8 percent and its Basel III Tier 1 capital ratio was a solid 9.3 percent. Along with this solid capital buffer, deposits grew 3 percent from the same period a year ago and loans grew 5 percent vs. the same period a year ago.

Michael Corbat, Chief Executive Officer of Citi, said: “Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging. During the quarter, we benefitted from seasonally strong results in our markets businesses, sustained momentum in investment banking, continued year-over-year growth in loans and deposits in Citicorp, and a more favorable credit environment. However, the environment remains challenging and we are sure to be tested as we go through the year."

“In addition to our performance across business lines, there were several other areas where we made progress. We reduced the drag on earnings caused by Citi Holdings and utilized a modest amount of our deferred tax assets. Our capital strength again improved during the quarter with the Tier 1 Common Ratio increasing to an estimated 9.3% on a Basel III basis. It is critical that Citi be viewed as an indisputably strong and stable institution and we made progress towards that goal,” Mr. Corbat concluded.

Citigroup shares rose 1.16 percent pre-market to $45.30 per share.