- Citi's net income dropped 46% to $2.5 billion in this year's first quarter, compared with $4.7 billion in the same quarter last year, according to an earnings report the bank released Wednesday.
- The nation’s third-largest bank boosted its loan-loss reserves by $4.9 billion, a precautionary measure spurred by the coronavirus pandemic and a switch to the current expected credit loss accounting standard.
- Fixed-income trading revenue at Citi jumped 39%, marking the segment's best quarter in eight years.
Citi more than tripled its safeguard against loan defaults, mirroring moves by the bank’s three largest competitors, all of whom reported net income losses of 45% or more for the quarter.
But the bolstered reserves may be handiest for Citi, which holds the world’s largest credit card portfolio. Spending on Citi-issued cards stayed relatively steady — at $128 billion — compared with last year’s first quarter. But the bank saw precipitous declines in card spending — as much as 30% in the last week of March, CFO Mark Mason said Wednesday, according to Bloomberg — as stay-at-home orders and economic difficulties curbed consumer habits.
"Particular categories you'd expect were impacted: travel was down roughly 75%, while dining and entertainment were down 60%," he said. "We've continued to see that pressure play through April."
Citi CEO Michael Corbat cited the bank's discipline in managing expenses for shielding the impact of the crisis until late in the quarter.
"All of the work we have done in recent years has put us in a very strong position from a capital, liquidity and balance sheet perspective," he said, striking a tone of reassurance. "While no one knows the severity or longevity of the virus' impact on the global economy, we have the resources we need to serve our clients without jeopardizing our safety and soundness."
Despite the damper the health crisis put on earnings, revenue at the bank increased 12% year over year. However, on a more granular level, revenue had its ups and downs. The bank's U.S. consumer operations saw their revenue increase slightly. However, revenue from corporate lending fell 40%.