01—Abstract
Summary
Summary of the 10-Q filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Citigroup Inc. reported a net income of $3.4 billiona, or $1.58 per diluted share, for the first quarter of 2024.
This represents a 27% decrease compared to the prior year's first quarter, primarily driven by higher expenses and cost of credit, partially offset by revenue growth when excluding divestiture-related impacts. Total revenues, net of interest expense, were $21.1 billionb, a 2% decrease on a reported basis. Excluding divestiture-related impacts of approximately $1 billion, revenues increased by 3%, led by strong performance in Banking, U.S. Personal Banking (USPB), and Services.
Markets and Wealth segments saw revenue declines. Operating expenses rose 7% to $14.2 billionc, impacted by a $251 million FDIC special assessment, repositioning costs, and restructuring charges. The cost of credit increased by 20% to $2.4 billion, largely due to higher net credit losses in USPB's cards portfolio.
Citigroup maintained a robust Common Equity Tier 1 (CET1) capital ratio of 13.5%d, exceeding regulatory requirements. Overall, Citigroup demonstrated progress towards its strategic priorities, with notable revenue growth in its Banking segment driven by investment banking and corporate lending, and continued strength in Services. Investors should monitor the ongoing impact of higher credit costs, particularly in the USPB segment, and the company's progress in managing expenses while investing in strategic growth initiatives.
02—Key points
Key Highlights
- Net income decreased 27% year-over-year to $3.4 billion ($1.58 per diluted share).
- Total revenues were $21.1 billion, down 2% reported, but up 3% excluding divestiture-related impacts.
- Operating expenses increased 7% to $14.2 billion, influenced by FDIC special assessment and restructuring charges.
- Cost of credit rose 20% to $2.4 billion, driven by higher credit losses in USPB's cards portfolio.
- Banking segment revenues surged 49% (35% excluding loan hedge impacts), driven by Investment Banking and Corporate Lending.
- Services segment revenues increased 8%, led by strong performance in Treasury and Trade Solutions (TTS) and Securities Services.
- Common Equity Tier 1 (CET1) capital ratio remained strong at 13.5%.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 3, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $21.02B$21.45B | −2.0% |
| Operating Income | $3.37B$4.61B | −26.8% |
| Interest Expense | $22.72B$16.05B | +41.6% |
| Net Income | $3.37B$4.61B | −26.8% |
| EPS (Basic) | $1.59$2.21 | −28.1% |
| EPS (Diluted) | $1.58$2.19 | −27.9% |
| Shares Outstanding (Basic) | 1.91B1.94B | −1.7% |
| Shares Outstanding (Diluted) | 1.94B1.96B | −1.1% |
05—Questions
Frequently Asked Questions
What was Citigroup's overall financial performance in Q1 2024 compared to Q1 2023?
Citigroup reported a net income of $3.4 billion ($1.58 per diluted share) for Q1 2024, a 27% decrease from $4.6 billion ($2.19 per diluted share) in Q1 2023. This decline was primarily due to higher operating expenses and a higher cost of credit, although revenues excluding divestiture-related impacts showed growth.
Which business segments performed well, and which saw a decline in revenue?
The Banking segment experienced a significant revenue increase of 49% (35% excluding loan hedge impacts), driven by strong performance in Investment Banking and Corporate Lending. The Services segment also saw an 8% revenue increase, supported by Treasury and Trade Solutions (TTS) and Securities Services. However, the Markets segment's revenue decreased by 7%, and the Wealth segment's revenue declined by 4%.
What were the main drivers of the increase in operating expenses?
Operating expenses increased by 7% to $14.2 billion. Key drivers included an incremental FDIC special assessment of $251 million, repositioning costs of $258 million, and net restructuring charges of $225 million, in addition to inflation and volume-related expenses.
How did the cost of credit change, and what was the primary reason?
The cost of credit increased by 20% to $2.4 billion. This was primarily driven by higher net credit losses in USPB's Branded Cards and Retail Services, attributed to the continued maturation of loan vintages originated during the pandemic and the impact of higher inflation and interest rates.
What is the status of Citigroup's capital position?
Citigroup maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio under the Basel III Standardized Approach at 13.5% as of March 31, 2024. This ratio comfortably exceeded the required regulatory CET1 Capital ratio of 12.3%, demonstrating ample capital buffers.
06—Continue