10-QPeriod: Q1 FY2022

CITIGROUP INC Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 9, 2022For Securities:CC-PNC-PR

Summary

Citigroup Inc. (C) reported its first quarter 2022 financial results, showing a 2% decrease in total revenues to $19.2 billion compared to the prior year, primarily due to lower non-interest revenue. Net income declined significantly by 46% to $4.3 billion, or $2.02 per diluted share, driven by higher cost of credit and operating expenses, partly offset by a lower effective tax rate. The company continued to invest in its transformation and risk management, including setting aside approximately $1.9 billion for potential credit losses related to Russia and the war in Ukraine. Despite the revenue and net income decline, Citigroup demonstrated solid loan and deposit growth across its Institutional Clients Group (ICG) and Personal Banking and Wealth Management (PBWM) segments and returned approximately $4 billion in capital to shareholders through dividends and share repurchases. The company is also progressing with its strategic refresh, including divesting several consumer banking franchises in Asia and EMEA. Geopolitical and macroeconomic uncertainties, including the war in Ukraine, supply chain disruptions, and inflationary pressures, are noted as ongoing challenges that could impact future results. The Institutional Clients Group (ICG) saw revenues decline by 2% due to lower Banking and Markets revenues, although Services revenues increased by 15%. Personal Banking and Wealth Management (PBWM) revenues decreased by 1%, impacted by lower non-interest revenue. Legacy Franchises reported a net loss of $383 million, reflecting lower revenues and higher expenses, largely due to divestiture-related costs. The CET1 capital ratio stood at 11.4%, slightly down from the prior year but well above regulatory minimums.

Financial Highlights

39 data points
Beta

Revenue

$19.19B

Net Income

$4.31B

22.4% Net Margin

EPS (Diluted)

$2.02

Total Assets

$2.39T

Cash & Equivalents

$272.09B

Free Cash Flow

-$10.48B

Financial Statements
Beta
Revenue$19.19B
Operating Income$4.31B
Interest Expense$2.28B
Net Income$4.31B
EPS (Basic)$2.03
EPS (Diluted)$2.02
Shares Outstanding (Basic)1.97B
Shares Outstanding (Diluted)1.99B

Key Highlights

  • 1Total revenues decreased by 2% year-over-year to $19.2 billion, primarily driven by lower non-interest revenue.
  • 2Net income fell by 46% to $4.3 billion ($2.02 per diluted share) compared to the prior year, impacted by higher credit costs and expenses.
  • 3The company announced a $1.9 billion provision for credit losses, largely attributed to exposures in Russia and the war in Ukraine.
  • 4Citigroup returned approximately $4 billion of capital to shareholders through dividends and share repurchases.
  • 5Operating expenses increased by 15% to $13.2 billion, including $535 million in goodwill impairment charges related to Asia Consumer divestitures.
  • 6The Common Equity Tier 1 (CET1) capital ratio was 11.4% as of March 31, 2022, a slight decrease from the prior year.
  • 7Progress continues on strategic exits, with sale agreements signed for an additional seven consumer banking franchises in Asia and EMEA.

Frequently Asked Questions

The significant decrease in net income was primarily driven by a higher cost of credit (including a substantial provision related to Russia/Ukraine), higher operating expenses (including goodwill impairment charges), and lower overall revenues.

Citigroup has ceased new business and client acquisition in Russia. The company has recorded a significant provision for credit losses ($1.9 billion in total, with approximately $1 billion allocated to Russia exposures) to account for potential impacts. They continue to monitor the situation and manage exposures and risks as appropriate, while also working to complete divestitures in affected regions.

Citigroup's Common Equity Tier 1 (CET1) capital ratio was 11.4% as of March 31, 2022, which is in excess of regulatory minimums. The ratio decreased slightly from the prior year due to capital returns to shareholders and adverse movements in Accumulated Other Comprehensive Income (AOCI), partially offset by net income.

The Institutional Clients Group (ICG) saw a 2% revenue decline due to lower Banking and Markets revenues, although Services revenue increased by 15%. Personal Banking and Wealth Management (PBWM) revenues decreased by 1%, impacted by lower non-interest revenue. Legacy Franchises reported a net loss of $383 million, primarily due to divestiture-related costs and lower revenues.