14 April 2014 – Beating the expectations of the Wall Street, Citigroup posted its better-than-expected first quarterly earning reports. Its first quarter net profit rose to $4.15 billion which is $1.30 a share from $2 billion. Wall Street market analysts had expected a net earning of $1.14 a share from Citigroup, US’s third largest bank.
Just before the close of trading hours, Citigroup shares were up by nearly 3.6 percent to reach at $47.32. On March 26 the Federal Reserve had rejected its capital plans resulting in troubled assets and dismal performance in the stock market by Citigroup’s shares. But, a better earnings report has somewhat made up for the loss that the bank went through earlier.
The bank’s core business, Citicorp experienced a drop in its stock value and profit, owing to its diminishing revenue from home mortgage lending and bond trading. The last few months have been tumultuous for the bank as its investors only lost faith in its ability because of its constant loses in revenue and its failure to get approval from the Federal Reserve on paying higher dividend.
Other major businesses of Citigroup also posted weaker revenue earlier this year. So, the profitable earnings report announced by the bank came as a bit of a surprise to everyone in the market. The bank’s troubled assets are now performing better, thanks to the positive earnings report and the total net profit the bank has gained.
Gerspach, Citigroup’s CFO earlier mentioned that the bank had found out a set of fraudulent loans, but which won’t be that troublesome for the bank as Citigroup expects to fully recoup the funds that were incurred through losses because of the fraudulent loans.
Micheal Corbat, CEO of Citigroup was under a lot of pressure to improve the bank’s overall performance, especially its relationship with the regulators. The first quarter earnings report couldn’t have come in a better time both for the bank and its CEO, it seems.