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Post Earnings Coverage as Citigroup's Q1 Bottom-line Surged 23% Y-o-Y; Beat Expectations

Upcoming AWS Coverage on ICICI Bank

LONDON, UK / ACCESSWIRE / April 20, 2017 / Active Wall St. announces its post-earnings coverage on Citigroup Inc. (NYSE: C). The Company released its financial results for the first quarter fiscal 2017 (Q1 FY17) on April 13, 2017. The New York-based bank's quarterly diluted EPS surged 23% y-o-y, outperforming analysts' consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Citigroup's competitors within the Money Center Banks space, ICICI Bank Ltd (NYSE: IBN), is estimated to report earnings on May 05, 2017. AWS will be initiating a research report on ICICI Bank following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on C; touching on IBN. Get our free coverage by signing up to: http://www.activewallst.com/register/.

Earnings Reviewed

In the reported quarter, Citigroup's total revenues were up by 3% on a y-o-y basis to $18.12 billion from $17.56 billion in Q1 FY16. Quarterly revenues also beat Wall Street's consensus of $17.81 billion. Furthermore, Citigroup's revenues growth was driven by rise in revenues in both the Institutional Clients Group (ICG) and Global Consumer Banking (GCB), partially offset by lower revenues in Corporate / Other primarily due to the continued wind down of legacy assets.

The global bank reported net income of $4.09 billion, or $1.35 per diluted share, in Q1 FY17 versus $3.50 billion, or $1.10 per diluted share, in Q1 FY16. Wall Street had expected net income of $1.24 per diluted share.

Performance Metrics

For the reported quarter, the bank's return on average assets came in at 0.91% compared to 0.79% in the prior year's comparable quarter. The return on average common equity stood at 7.4% in Q1 FY17 versus 6.4% reported in the year ago same period.

Citigroup's net interest revenue as a percentage of average interest-earning assets (NIM) for the reported quarter was down by five basis points to 3.63% in Q1 FY17 from 3.68% in Q1 FY16. However, average interest earning assets rose to $1.63 trillion in Q1 FY17 from $1.56 trillion in the previous year's quarter.

As on March 31, 2017, the bank's Common Equity Tier 1 capital ratio stood at 12.8% compared to 12.34% as at end of previous year's last quarter. However, supplementary leverage ratio fell to 7.3% in Q1 FY17 from 7.44% in the year ago same quarter. Meanwhile, tangible book value per share improved from $65.94 in Q1 FY17 from $62.58 per share in Q1 FY16.

Segment Performance

In the three months ended on March 31, 2017, Global Consumer Banking (GCB) segment revenues improved 1% y-o-y to $7.82 billion. Meanwhile, on constant dollars, a 3% revenue growth was driven by a 2% increase in North America GCB and a 3% rise in revenues from international GCB. However, GCB segment's net income declined 16% y-o-y to $1.00 billion, primarily due to higher cost of credit.

Institutional Clients Group, revenues rose 16% y-o-y in Q1 FY17 to $9.13 billion, as the segment witnessed growth in both Banking and Markets and Securities Services revenues. Additionally, the segment's adjusted net income came in at $3.00 billion, surging 61% y-o-y, primarily attributed to higher revenues, lower cost of credit and lower operating expenses.

Due to legacy asset run-off and divestiture activity along with lower revenue from treasury-related hedging activity, Corporate /Other segment revenues declined 40% y-o-y in Q1 FY17 to stand at $1.18 billion. Net income also declined to $92 million in Q1 FY17 from $450 million in the prior year's same period, as the segment suffered from lower revenue, partially offset by lower operating expenses and lower cost of credit.

Geographical Contribution

Citicorp's North American revenues for the reported period were $8.40 billion compared to $7.81 billion in the year ago same period. The region contributed $1.73 billion to the Company's income from continuing operations in Q1 FY16, rising 25% from $1.38 billion in Q1 FY16.

Europe, Middle East, and African regions revenues stood at $2.81 billion, which came in 30% above $2.17 billion reported the year ago comparable quarter. The region's contribution to Citicorp's income from continuing operations surged to $855 million in Q1 FY17 from $374 million in Q1 FY16.

In Q1 FY17, Latin American revenues came in at $2.28 billion versus $2.19 billion in the last year's corresponding quarter. Income from continuing operations was $605 million in Q1 FY17 compared to $476 million Q1 FY16.

Additionally, Asian revenues grew marginally to $3.46 billion in Q1 FY17 from $3.44 billion the previous year's comparable quarter. However, the region's contribution to Citicorp's income from continuing operations fell to $827 million in Q1 FY17 from $834 million in Q1 FY16.

Stock Performance

At the closing bell, on Wednesday, April 19, 2017, Citigroup's stock slipped 1.18%, ending the trading session at $57.73. A total volume of 18.10 million shares were traded at the end of the day. In the last six months and previous twelve months, shares of the Company have advanced 19.52% and 27.90%, respectively. The stock is trading at a PE ratio of 11.56 and has a dividend yield of 1.11%.

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SOURCE: Active Wall Street