Citi Earnings Beat Expectations, But The Consumer Is Still Deleveraging
It earned $1.23 per share on an adjusted basis. This is higher than the $1.17 expected by analysts.
Revenue came in at $20.8 billion, which was a tad higher than the $20.1 billion expected.
"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," said Citi CEO Michael Corbat. "However, the environment remains challenging and we are sure to be tested as we go through the year. "
Last week, JP Morgan and Wells Fargo both announced better-than-expected earnings. But signs of slowing loan growth had some worried about the near-term outlook for the industry as well as the economy in general.
"Global Consumer Bank revenues of $10.0 billion were flat versus the prior year period, as volume growth in most businesses was offset by the continuing impact of spread compression globally and consumer deleveraging in North America," said management.
Here's more on North American consumer banking:
North America GCB revenues declined 1% to $5.1 billion driven mainly by lower retail banking revenues with total cards revenues (Citi-branded cards and Citi retail services) flat versus the prior year period. Retail banking revenues declined 3% to $1.6 billion from the first quarter 2012, primarily reflecting the ongoing impact of spread compression, partially offset by higher volumes. Mortgage banking volumes remained strong, although margins declined versus the prior year period. Citi-branded cards revenues declined 1% to $2.0 billion, reflecting lower average loan balances as Citi-branded cards loans declined 5% partially offset by an improvement in net interest spreads. Citi retail services revenues increased 1% to $1.5 billion driven by improved net interest spreads that were partially offset by a 2% decline in average loans versus the prior year period. Citi retail services revenues were also negatively impacted by higher contractual partner payments due to the impact of improving credit trends.