Citigroup's Q1 earnings beat estimates

NEW YORK — Citigroup beat Wall Street expectations Monday, announcing $3.9 billion in first-quarter earnings, or $1.23 a share, on revenues of $20.1 billion.

On an adjusted basis, the global bank's earnings were $4.1 billion, or $1.30 a share.

Analysts polled separately by Thomson Financial Research and FactSet had expected earnings per share of $1.14.

"Despite a quarter that was difficult for our company, we delivered strong results," said City CEO Michael Corbat in a statement announcing the earnings results. "Both our consumer and institutional businesses performed well and we grew both loans and deposits while holding the line on our expenses."

Citigroup shares were up more than 3.7% at $47.40 In U.S. financial market trading shortly after 10 a.m. EDT.

Despite the generally upbeat financial news, Citigroup's $20.1 billion in revenues represents a 1% decline from the first quarter of 2013. The decrease was primarily driven by a decline in fixed income markets revenues in the bank's Institutional Clients Group and lower U.S. mortgage refinancing activity. The bank said the declines were partially offset by higher Citi Holdings revenues.

The net results also included an estimated $235 million net fraud loss in Mexico the bank reported to the Securities and Exchange Commission in February. In that disclosure, the bank said an internal review had found an apparent $400 million gap owed to its Mexican unit by a Mexican oil-services company called Oceanografia SA de CV.

However, the overall earnings results marked a contrasted with news in March that Citigroup was one of four banks the Federal Reserve blocked from boosting stockholder dividend payments and increasing stock buybacks. That announcement was part of the Fed's breakdown of its annual bank "stress tests" in March.

Citigroup had planned to raise its quarterly dividend to 5 cents per share and repurchase $6.4 billion of the bank's stock. But the central bank action only allowed Citigroup to continu! e its previous 1-cent-per share dividend and $1.2 billion in stock repurchases.

The Fed said Citigroup had made progress improving its risk management and control practices in recent years. But the bank's capital plan included "a number of deficiencies" the Fed said, including Citigroup's ability to project revenue and losses "for material parts of the firm's global operations" in a sharp economic downturn."

The stress test outcome "subdued prospects for any meaningful capital return in 2015," said brokerage firm Sterne Agee in an April 3 note, adding that "slowing earnings growth only serve to keep the company's valuation in check and limit the potential upside."