Citi’s Q1 Profits Beat Street Estimates, Fueled by Fixed Income Activity

Citi's Q1 earnings bested street projections, showing an uptick in profits and revenues.

Citi (NYSE:C) has reported its quarterly earnings, which revealed a number of surprise revelations, given the currently moribund state surrounding global lenders. Citi’s metrics showed a rising profits, propped up by a healthy performance out of its fixed-income sector, per a group filing statement.

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The past two years have been unkind to lenders – while most of the attention has been trained on European lenders that are engulfed in talks of relocation, diving revenues, job cuts, and in some cases mergers, US banks are also facing a dearth of profits. However, Citi managed to post a successful quarter, led by its fixed-income trading.

Market Catalysts Drive Activity

In terms of markets, Q1 2017 was largely dominated by the incoming administration of Donald Trump, which has done little to placate trading activity. Nearly two months of constant scandals and controversial decisions has helped breathe life into dormant markets, helping spark activity worldwide.

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In conjunction with this trend, the US Federal Reserve made a long awaited rate hike, which also boosted activity. Nowhere was this trend more evident than in the fixed-income sector, which saw its profits rise over 17.0 percent on a yearly basis, surpassing street estimates.


Additionally, Citi also saw a stronger net income in Q1 2017, having inked a figure of $4.09 billion or $1.35 per share for the period ending March 31, 2017. This compared with only $3.5 billion ($1.10 per share) over the same period back in 2016, justifying an increase of 16.9 percent year-over-year from Q1 2016 – analysts had priced in a figure of $1.24, with Citi surpassing this by 8.9 percent.

Total revenue also was pointed higher in Q1 2017 – above market estimates – having come in at $18.12 billion. This was good for a climb of 3.0 percent on a year-over-year basis from Q1 2016, also overtaking a consensus $17.76 billion prediction. Operating expenses were virtually unchanged year-over-year at $10.48 billion.

At the time of writing, Citi’s (NYSE:C) shares have settled at $58.40 ahead of the US open Thursday, down -0.11 percent in pre-market trading.

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