Citigroup marks $483m charge for reorganisation 

Citibank has a significant presence in Ireland.

Citigroup's first-quarter profit fell 27% but beat market expectations, while taking a $483m (€454m) charge tied to chief executive Jane Fraser's sweeping reorganisation. 

Net income at the US bank, which has a significant presence in Ireland, fell to $3.4bn in the three months to the end of March, the bank said. That compares with $4.6bn a year earlier. 

"Last month marked the end to the organisational simplification we announced in September," Ms Fraser said in a statement. "The result is a cleaner, simpler management structure that fully aligns to and facilitates our strategy." 

CFO Mark Mason said the headcount reduction of 7,000 would appear in data over the next few quarters as the average notice period for laid-off employees was about 90 days. The lender expects an annual savings of $1.5bn from the overhaul, it said in an investor presentation.

"Citigroup's 1Q results were healthy and demonstrated that the company continues to make progress on its transformation," said Ian Lapey, portfolio manager at Gabelli Funds, which hold shares in the bank.

Revenue fell 2% on a reported basis to $21.1bn in the first quarter. Excluding one-off items such as the sales of businesses last year, it was higher in the quarter. It forecast revenue between $80bn to $81bn for 2024, about 1.8% to 3% higher than $78.5bn in 2023.

"There's a lot of risks out there," Mr Mason told reporters on a conference call. 

"The global economy seems to be resilient. I think that we do expect that there will be a slowdown in growth through 2024, but when you look at the labour markets and the strength of the consumer, that seems to be holding up."

The performance at Citi's services and banking divisions stood out. Revenue from the business that provides cash management, clearing and payments services for the world's biggest corporations rose 8% to $4.8bn, buoyed by an 18% jump in securities services revenue to $1.3bn. 

Meanwhile, a resurgence in capital markets and investment banking fees fuelled a 49% surge in banking revenue to $1.7bn. Corporate lending rose 34%. 

Markets were a sore spot. Trading revenue fell 7% to $5.4bn, dragged lower by fixed income and currencies. Wealth management revenue shrank 4% to $1.7bn. 

While Citi's consumer banking division grew revenue, it also stockpiled more money to cover potential losses from customers who default on their loans. The bank said credit costs of $2.2bn were driven by higher non-conforming loans of $1.9bn. 

Rival JPMorgan Chase reported a higher first-quarter profit, while Wells Fargo's quarterly profit shrank as it earned less from customer interest payments. 

• Reuters