Citigroup Inc sees profits decline by 46% in first quarter

Citigroup increased its reserves by $1.9 billion in the first quarter to prepare for Russia-Ukraine war-related losses and economic impacts. Doing this led to increased costs of credit to $755 million. The number was positive $2.1 billion last year when they freed the Covid-related provisions.

Citigroup Inc stated in December that it had reduced the Russian exposure from $9.8 billion to $7.8 billion. It also stated that in the worst-case scenario, if the war takes on an even uglier turn, the group's loss would not exceed $3 billion now. Earlier, the loss would have been $5 billion.

The net income is now at $2.02 per share or down to $4.30 billion for the first quarter. Last year, the same period had the numbers at $3.62 per share or $7.94 billion.


The revenue has fallen by 2% and stands at $19.2 billion. On average, the analysts expected a $1.55 per share profit. The fall in revenue attributes to the fall in revenue from investment banking.

Citigroup's most important business, Treasury and Trade Solutions, had increased revenue by 18% because of growth in fees and increased net interest income.

While announcing the results, the CEO of Citigroup, Jane Fraser, stated that the group is executing the strategy they announced amidst a volatile macro and geopolitical environment. Fraser is at the forefront of a Citigroup overhaul as the bank is falling behind the pecking order compared to its peers. The banking regulators in the U.S. are issuing orders that the group is trying to carry out to fix the compliances and risks.

However, her work has led to increased costs, and the expenses have risen by 10% this quarter minus the divestitures in the Asian consumer business. Even though all this is happening, Citi has been buying back its shares by using its excess capital.