NEW YORK (AP) — Citigroup's first-quarter earnings rose, helped by declines in expenses and provisions for bad loans. The earnings improved even as revenue from mortgage refinancing and bond trading fell.
EARNINGS: Citigroup reported a profit of $4.1 billion in the first quarter, after stripping out the effects of an accounting change and a tax item. That was up 2.5 percent from the same period a year earlier, when it made $4 billion.
EXPECTATIONS EXCEEDED: On a per-share basis, the earnings amounted to $1.30 compared with $1.29 a year earlier. That was better than estimates of analysts polled by FactSet, who were expecting $1.14 per share.
LOWER REVENUE: Revenue was $20.1 billion. That was down 2 percent from the same period last year when the bank generated revenue of $20.6 billion. Analysts had forecast revenue of $19.5 billion.
'BAD BANK' BETTER: Citi got a boost from improving results in its Citi Holdings unit, which is selling off assets such as mortgages that soured in the financial crisis. Losses at Citi Holdings fell to $284 million from $804 million in the same period a year earlier. The bank also benefited from a small drop in expenses. Citi Chief Financial Officer John Gerspach said on a call with reporters that the bank wants to reduce the losses to "as close to zero as possible" by 2015.
SOUTH OF THE BORDER: Citi also revealed more fraud at its Mexican unit. The bank reduced its 2013 earnings by $235 million in February, saying it was a victim of fraud committed by a Mexican oil services company which secured hundreds of millions of dollars in short-term loans. The company, Oceanografia S.A. de C.V., or OSA, overstated by $400 million the business it was doing with Mexico's state-owned oil company Petróleos Mexicanos, or Pemex.
Citi's Gerspach said the bank's Mexican unit uncovered another fraud of under $30 million in dealing with another supplier, which Citi did not name. Gerspach said that the supplier had already started to return the funds and that Citi expected to get all of its money back.