• April 13, 2017
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Citigroup releases Q1 2017 results

• Earnings per share of $1.35
• Net income of $4.1 Billion 
• Revenues of $18.1 Billion 
• Returned $2.2 Billion of capital to common shareholders 
• Repurchased 30 Million common shares 
• Book value per share of $75.86 
• Tangible book value per share of $65.94

Citigroup Inc. reported net income for the first quarter 2017 of $4.1 billion, or $1.35 per diluted share, on revenues of $18.1 billion. This compared to net income of $3.5 billion, or $1.10 per diluted share, on revenues of $17.6 billion for the first quarter 2016. Revenues increased 3% from the prior year period, driven by growth in both the Institutional Clients Group (ICG) and Global Consumer Banking (GCB), partially offset by lower revenues in Corporate / Other primarily due to the continued wind down of legacy assets. Net income of $4.1 billion increased 17%, driven by the higher revenues and lower cost of credit.

Earnings per share of $1.35 increased 23% from $1.10 per diluted share in the prior year period, driven by the growth in net income and a 6% reduction in average diluted shares outstanding. These results were impacted by episodic items recorded in Corporate / Other described below, which on a net basis benefitted earnings by roughly $0.08 per share in the first quarter 2017. In the discussion throughout the remainder of this press release, percentage comparisons are calculated for the first quarter 2017 versus the first quarter 2016, unless otherwise specified.

Citi CEO Michael Corbat said:

“The momentum we saw across many of our businesses towards the end of last year carried into the first quarter, resulting in significantly better overall performance than a year ago. Revenues increased in both our consumer and institutional lines of business, most notably in areas where we have been investing such as Equities, U.S. Cards and Mexico. We grew loans and deposits and achieved an efficiency ratio of just under 58%, an ROA of 91bps and a ROTCE ex-DTA of over 10%, showing good progress towards chieving our near-term financial targets.

“Through our earnings and the utilization of $800 million in Deferred Tax Assets, we generated $5.5 billion of total regulatory capital before returning $2.2 billion to our shareholders. Our CET 1 Capital ratio rose to 12.8% and we could not be more committed to continuing to increase the capital we return to our shareholders,” Mr. Corbat concluded.

Citigroup revenues of $18.1 billion in the first quarter 2017 increased 3%, driven by a 16% increase in ICG, as well as a 1% increase in GCB, partially offset by a 40% decrease in Corporate / Other due to the continued wind down of legacy assets. Excluding the impact of foreign exchange translation7, Citigroup revenues increased 4%.

Citigroup's net income increased to $4.1 billion in the first quarter 2017, primarily driven by higher revenues and lower credit costs, as expenses remained largely unchanged. Citigroup's effective tax rate was 31% in the current quarter compared to 30% in the first quarter 2016.
Citigroup's operating expenses were largely unchanged at $10.5 billion in the first quarter 2017. In constant dollars, operating expenses increased by 1%, mainly driven by higher performance-related compensation and higher business volumes, mostly offset by lower repositioning costs, as investments were largely funded through efficiency savings.

Citigroup's cost of credit in the first quarter 2017 was $1.7 billion, a 19% decrease, largely driven by a loan loss reserve release of $77 million, compared to a build of $233 million in the prior year period driven by energy-related exposures in ICG. A decline in the provision for benefits and claims and a modest decline in net credit losses also contributed to the lower cost of credit.
Citigroup's allowance for loan losses was $12.0 billion at quarter end, or 1.93% of total loans, compared to $12.7 billion, or 2.07% of total loans, at the end of the prior year period. Total non-accrual assets declined 11% from the prior year period to $5.5 billion. Consumer non-accrual loans declined 18% to $3.0 billion. Corporate non-accrual loans increased 1% to $2.3 billion but were down 3% from the prior quarter.

Citigroup's end of period loans were $629 billion as of quarter end, up 2% from the prior year period. In constant dollars, Citigroup's end of period loans also grew 2%, as 8% growth in GCB and 3% growth in ICG was partially offset by the continued wind down of legacy assets in Corporate / Other.

Citigroup's deposits were $950 billion as of quarter end, up 2%. In constant dollars, Citigroup deposits were up 3%, driven by a 4% increase in GCB deposits and a 3% increase in ICG deposits, slightly offset by a decline in Corporate / Other deposits.

Citigroup's book value per share was $75.86 and tangible book value per share was $65.94, each at quarter end, representing a 6% and 5% increase respectively. At quarter end, Citigroup's Common Equity Tier 1 Capital ratio was 12.8%, up from 12.3% in the prior year period, driven primarily by earnings partially offset by capital return. Citigroup's Supplementary Leverage Ratio for the first quarter 2017 was 7.3%, down from 7.4% in the prior year period, as an increase in Tier 1 Capital was more than offset by an increase in Total Leverage Exposure. During the first quarter 2017, Citigroup repurchased approximately 30 million common shares and returned a total of approximately $2.2 billion to common shareholders in the form of common share repurchases and dividends.

Re-disseminated by The Asian Banker