One of the three big banks kicking off earnings this week, Citigroup Inc. (C, Financial) reported strong first-quarter results before the opening bell on Friday.
The New York City-based bank posted earnings per share of $1.68, topping Thomas Reuters’ estimates of $1.61. Quarterly revenue grew 3% from the prior-year quarter to $18.9 billion, beating expectations of $18.8 billion.
The company attributed its performance to a lower corporate tax rate, which decreased to 24% from 31% last quarter with the passage of the U.S. Tax Cuts and Jobs Act, and strong revenue from stock trading. In a statement, CEO Michael Corbat said the company’s performance “demonstrate[s] strength and balance across [the] franchise.”
“We grew revenue across both our institutional and consumer businesses and delivered solid, client-led revenue gains in areas we have been investing in such as Citibanamex, TTS, Equities and the Private Bank,” he said.
Revenue from the bank’s fixed-income trading business declined 7% to $3.4 billion, falling short of the expected $3.68 billion. This was offset, though, by a 38% increase in equity trading sales. Overall trading revenue for the quarter grew 3% to $5 billion.
Boosted by growth across all regions, revenue for Citigroup’s global consumer banking business swelled 7% to $8.4 billion. North America revenue rose 4% to $5.2 billion, while Latin America sales climbed 15% to $1.3 billion.
Not all of the bank’s numbers were glowing, however. Citigroup recorded net interest income, an important metric for banks, of $11.17 billion, just shy of the $11.26 billion expected. In addition, the net interest margin came in at 2.64%, falling from 3.04% in fourth-quarter 2017.
While shares initially rose 1.4% to open at $73.07 on Friday morning, they declined more than 2% after the market opened.
With a market cap of $181.81 billion, Citigroup was trading around $71.01 on Friday afternoon, down 1.55%, with a price-book ratio of 1.01. GuruFocus estimates the stock has lost approximately 6% year to date.
Disclosure: No positions.