10-QPeriod: Q1 FY2023

CITIGROUP INC Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 5, 2023For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported a solid first quarter of 2023, demonstrating continued progress towards its strategic priorities. Total revenues increased by 12% year-over-year, driven by a strong performance in net interest income and gains from divestitures, though excluding these impacts, revenue growth was 6%. The company continued its consumer banking business divestitures, completing sales in India and Vietnam. While expenses rose by 1% (5% excluding divestiture impacts), primarily due to transformation investments, risk and control enhancements, and inflation, this was partially offset by productivity savings. Key financial highlights include a robust Common Equity Tier 1 (CET1) capital ratio of 13.4%, well above regulatory requirements. The cost of credit increased to $2.0 billion, reflecting a build in the allowance for credit losses and higher net credit losses, particularly in the cards business, as the company anticipates further normalization towards pre-pandemic levels in 2023. Citigroup returned $1.0 billion to common shareholders through dividends, while common share repurchases remained paused in anticipation of potential capital impacts from divestitures.

Financial Highlights

39 data points
Beta

Revenue

$21.45B

Net Income

$4.61B

21.5% Net Margin

EPS (Diluted)

$2.19

Total Assets

$2.46T

Cash & Equivalents

$323.96B

Free Cash Flow

-$32.12B

Financial Statements
Beta
Revenue$21.45B
Operating Income$4.61B
Interest Expense$16.05B
Net Income$4.61B
EPS (Basic)$2.21
EPS (Diluted)$2.19
Shares Outstanding (Basic)1.94B
Shares Outstanding (Diluted)1.96B

Key Highlights

  • 1Revenues increased 12% year-over-year to $21.4 billion, driven by a 23% increase in net interest income and gains from consumer banking divestitures.
  • 2Net income attributable to common shareholders was $4.3 billion, or $2.19 per diluted share, up 8% from the prior year.
  • 3The Common Equity Tier 1 (CET1) capital ratio improved to 13.4% as of March 31, 2023, from 11.4% a year prior.
  • 4Provisions for credit losses increased significantly to $2.0 billion, up from $0.8 billion in Q1 2022, due to a build in the allowance for credit losses and higher net credit losses, particularly in consumer banking.
  • 5Expenses increased 1% year-over-year to $13.3 billion, primarily due to investments in transformation, risk and controls, and inflation.
  • 6Citigroup continued to execute its divestiture strategy, completing the sales of its India and Vietnam consumer banking businesses.
  • 7The company returned $1.0 billion to common shareholders in the form of dividends, while share repurchases were paused.

Frequently Asked Questions

Citigroup reported net income of $4.6 billion, or $2.19 per diluted share, for the first quarter of 2023. This represents an increase of 8% in EPS compared to the prior-year period.

Total revenues increased by 12% to $21.4 billion, primarily driven by a 23% rise in net interest income and gains from consumer banking divestitures. Excluding divestiture impacts, revenues grew 6%. Operating expenses increased by 1% to $13.3 billion. Excluding divestiture-related costs, expenses rose 5%, largely due to investments in transformation and risk and control initiatives, which were partly offset by productivity savings.

Citigroup's Common Equity Tier 1 (CET1) capital ratio stood at 13.4% as of March 31, 2023, an improvement from 11.4% as of March 31, 2022. This ratio is comfortably above the required regulatory CET1 capital ratio of 12.0% under the Basel III Standardized Approach.

The cost of credit increased to $2.0 billion from $0.8 billion in the prior-year period. This rise was attributed to a net build of $0.7 billion in the allowance for credit losses and higher net credit losses, particularly in the Branded Cards and Retail Services segments within Personal Banking and Wealth Management, reflecting an ongoing normalization towards pre-pandemic levels.