By Orla McCaffrey 

Citigroup Inc. on Thursday reported sharply higher first-quarter profit and said it is shutting down most of its consumer-banking operations in Asia, Europe and the Middle East.

The bank posted a profit of $7.9 billion, or $3.62 per share, well above the $2.60 per share forecast by analysts polled by FactSet. A year earlier, Citigroup had reported a quarterly profit of about $2.5 billion, or $1.05 a share.

Citigroup also said it would exit its consumer operations in 13 countries, mostly across Asia, to focus on wealth management and other businesses.

Jane Fraser, who took over as chief executive officer last month, said in a statement that those consumer banks were excellent businesses, but "we don't have the scale we need to compete." She said Citigroup would continue to invest in wealth management and in the businesses that work with corporate clients in Asia.

Citigroup is a giant on Wall Street but it is relatively small in U.S. consumer banking, a combination that some analysts and investors have criticized. Ms. Fraser said in January that the bank would restructure the businesses that manage money for wealthy customers, with the goal of getting to clients earlier and keeping them as they grow richer. The bank said Thursday that it will operate consumer banking in four "wealth centers" where it expects strong growth for the wealth-management business: Singapore, Hong Kong, the United Arab Emirates and London.

Revenue fell 7% to $19.3 billion. That was still ahead of the $18.8 billion analysts had expected.

During the same period last year, Citigroup and other big banks were scrambling to determine how many billions of dollars to set aside for loan losses they feared the coronavirus pandemic could fuel.

The New York bank released $3.85 billion in reserves, a major driver of earnings in the first quarter and a sign the bank's outlook on the economy has improved. The bank released $1.5 billion in the fourth quarter.

Citigroup and other large banks have started to discharge some of the funds earmarked last year to cover loan losses, boosting earnings a year after coronavirus concerns burned their profits.

The reserves weighed on earnings for much of last year, when financial institutions believed that elevated numbers of businesses and consumers would miss loan payments. But a resurgent U.S. economy, plus trillions of dollars in government stimulus and ramped-up vaccine distribution, means banks expect far fewer of those losses to materialize.

Citigroup shares have risen about 18% since the beginning of the year. The KBW Nasdaq Bank Index, which tracks shares of the largest lenders, is up 26% so far this year, compared with a 10% gain in the S&P 500.

Write to Orla McCaffrey at


(END) Dow Jones Newswires

April 15, 2021 08:40 ET (12:40 GMT)

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