C Citigroup Inc

By David Benoit 

Citigroup Inc. said Wednesday its first-quarter profit plunged 46%, after the bank set aside nearly $5 billion to prepare for a wave of loan defaults as the coronavirus pandemic pummels the global economy.

Citigroup's profit for the first three months of the year fell to $2.52 billion, or $1.05 per share, from $4.71 billion, or $1.87 a share. Analysts had expected $1.07 a share, according to FactSet, a forecast that has been cut in half since late February.

Revenue rose 12% to $20.73 billion, compared with $18.58 billion a year earlier and the $19.03 billion analysts expected.

The revenue gains were powered by Citigroup's investment bank, which benefited from the volatile markets to post a strong quarter in trading.

Citigroup increased its loan loss provision, money for loans it now thinks can go bad, by $4.92 billion, from just $278 million in the prior quarter, partly reflecting an accounting change as well as concerns about the economy. Of that, $2.85 billion came in the consumer bank and another $1.88 billion in the corporate bank. Its total provision in the quarter was $7 billion.

Citigroup shares have fallen 43% this year through Tuesday, worse than the KBW Nasdaq Bank Index's 37% drop and the S&P 500's roughly 12% retreat.

Citigroup has offices around the world, giving it an early view into the spread of the virus. The bank moves money around the world for governments and multinational corporations, but is confronting a global slowdown that has all but brought the economy to a halt. At the same time it is grappling with how to keep operations running as the virus has spread throughout the U.S. and in its headquarters city, New York.

The first-quarter results are likely only the first sign of a painful contraction that could get much worse. JPMorgan Chase & Co. and Wells Fargo & Co. reported sharply lower earnings Tuesday after socking away billions of additional dollars for potentially bad loans.

Write to David Benoit at david.benoit@wsj.com

(END) Dow Jones Newswires

April 15, 2020 08:47 ET (12:47 GMT)

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