10-QPeriod: Q1 FY2012

CITIGROUP INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 4, 2012For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported a net income of $2.9 billion, or $0.95 per diluted share, for the first quarter of 2012, a slight decrease of 2% from the prior-year period. Excluding certain valuation adjustments and gains from minority investments, the adjusted net income rose to $3.4 billion, or $1.11 per diluted share, driven by higher revenues, lower credit costs, and a reduced effective tax rate. Total revenues, net of interest expense, were $19.4 billion, down 2% year-over-year, impacted by negative valuation adjustments on derivatives. However, underlying revenues, excluding these adjustments and minority investment gains, increased by 1% due to growth in Citicorp's core businesses—Global Consumer Banking and Institutional Clients Group—which more than offset declines in Citi Holdings. Operating expenses remained flat year-over-year, with investment spending offset by efficiency savings. Credit quality showed improvement, with total provisions for credit losses declining 5% and net credit losses falling 37% year-over-year. The company's capital position strengthened, with Tier 1 Common and Tier 1 Capital ratios increasing. Citi Holdings continued to divest non-core assets, with total assets declining 29% year-over-year. The company's strategic focus remains on its core Citicorp businesses, which are demonstrating solid revenue growth and improved profitability.

Financial Highlights

38 data points
Beta

Revenue

$19.12B

Net Income

$2.93B

15.3% Net Margin

EPS (Diluted)

$0.95

Total Assets

$1.94T

Free Cash Flow

$8.61B

Financial Statements
Beta
Revenue$19.12B
Operating Expenses$12.18B
Operating Income$2.94B
Interest Expense$5.59B
Net Income$2.93B
EPS (Basic)$0.98
EPS (Diluted)$0.95
Shares Outstanding (Basic)2.93B
Shares Outstanding (Diluted)3.01B

Key Highlights

  • 1Net income of $2.9 billion ($0.95 per diluted share), a 2% decrease from Q1 2011.
  • 2Adjusted net income of $3.4 billion ($1.11 per diluted share) showed a year-over-year increase.
  • 3Total revenues of $19.4 billion, down 2% year-over-year, impacted by derivatives valuation adjustments.
  • 4Operating expenses remained flat year-over-year, benefiting from efficiency savings.
  • 5Total provisions for credit losses decreased 5%, and net credit losses fell 37% year-over-year, indicating improved credit quality.
  • 6Tier 1 Common ratio increased to 12.5% and Tier 1 Capital ratio to 14.26%, reflecting strengthened capital position.
  • 7Citi Holdings assets declined 29% year-over-year as part of the ongoing divestiture strategy.

Frequently Asked Questions

Citigroup reported a net income of $2.9 billion for the first quarter of 2012, a 2% decrease compared to the first quarter of 2011. However, when excluding certain valuation adjustments and gains on minority investments, the adjusted net income showed a year-over-year increase, driven by revenue growth in core businesses, improved credit costs, and a lower tax rate.

Total revenues decreased by 2% year-over-year, primarily due to negative valuation adjustments on derivatives. However, underlying revenues from Citicorp's core businesses, Global Consumer Banking and Institutional Clients Group, increased, offsetting declines in Citi Holdings.

Citigroup's capital position strengthened, with its Tier 1 Common ratio increasing to 12.5% and its Tier 1 Capital ratio increasing to 14.26% compared to the prior year. The company indicated it remains 'well capitalized' under regulatory definitions.

Citi Holdings, which contains non-core businesses, saw its assets decline by 29% year-over-year as the company continues its strategy to exit these portfolios. This divestiture effort is aimed at streamlining operations and focusing on core Citicorp businesses.