10-QPeriod: Q1 FY2009

CITIGROUP INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 11, 2009For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported a net income of $1.593 billion for the first quarter of 2009, a significant turnaround from a net loss of $5.111 billion in the same period of the prior year. Total revenues, net of interest expense, more than doubled to $24.789 billion from $12.441 billion in Q1 2008, primarily driven by strong trading results in the Institutional Clients Group (ICG) and lower net write-downs. Operating expenses decreased by 23% year-over-year, reflecting re-engineering efforts and cost reductions. Despite the return to profitability, the company's financial health was still impacted by a challenging economic environment, evidenced by a 76% increase in provisions for credit losses and a 10% decline in Global Cards revenue. The company also saw a significant year-over-year improvement in its loss per share, moving from a loss of $0.18 in Q1 2008 to $0.18 in Q1 2009, though this was impacted by accounting adjustments related to convertible preferred stock. The company's capital ratios remained robust, with a Tier 1 Capital Ratio of 11.92% at March 31, 2009, bolstered by government programs and ongoing exchange offers aimed at improving its capital structure.

Financial Statements
Beta
Revenue$24.52B
Operating Expenses$11.69B
Operating Income$1.71B
Interest Expense$7.66B
Net Income$1.59B
EPS (Basic)$-1.80
EPS (Diluted)$-1.80
Shares Outstanding (Basic)538.50M
Shares Outstanding (Diluted)595.33M

Key Highlights

  • 1Citigroup reported a net income of $1.593 billion in Q1 2009, a significant improvement from a net loss of $5.111 billion in Q1 2008.
  • 2Total revenues increased by 99% to $24.789 billion, driven by strong performance in the Institutional Clients Group (ICG) and lower write-downs.
  • 3Operating expenses decreased by 23% to $12.087 billion due to re-engineering efforts and cost controls, including a 16% reduction in headcount.
  • 4Provisions for credit losses increased by 76% to $10.307 billion, reflecting the ongoing impact of the challenging economic environment on consumer and corporate borrowers.
  • 5The company's Tier 1 Capital Ratio stood at 11.92%, and Total Capital Ratio at 15.61%, indicating strong regulatory capital levels.
  • 6Citigroup continued its efforts to de-risk and strengthen its balance sheet, including an expansion of its exchange offer for preferred securities, aiming to convert $33 billion of preferred stock into common equity.
  • 7The company is actively working with borrowers to avoid foreclosures, assisting approximately 80,000 borrowers and providing help to 1.3 million credit card members through various forbearance programs.

Frequently Asked Questions

Citigroup reported a net income of $1.593 billion for the first quarter of 2009.

Total revenues, net of interest expense, increased significantly by 99% to $24.789 billion in the first quarter of 2009, compared to $12.441 billion in the first quarter of 2008.

Citigroup's Tier 1 Capital Ratio was 11.92% at March 31, 2009, and its Total Capital Ratio was 15.61%, indicating that the company met the regulatory requirements to be considered 'well capitalized'.

In the first quarter of 2009, Citigroup entered into a loss-sharing agreement with the U.S. government, issued preferred stock to the U.S. Treasury and FDIC, and announced an expansion of its exchange offer for preferred securities, aiming to convert up to $33 billion of preferred stock into common equity.

Citigroup recorded provisions for credit losses of $10.307 billion, a 76% increase year-over-year, reflecting the challenging economic environment. The company also actively engaged in loan modifications and forbearance programs to support approximately 80,000 mortgage borrowers and 1.3 million credit card members.