Citigroup reported an unexpected profit increase, beating analysts’ estimates as the company recouped funds previously set aside for loan losses.
Bloomberg News reports that first-quarter net income climbed 3.5% to $3.94bn from $3.81bn a year earlier.
Chief Executive Officer Michael Corbat, 53, is getting help from an improving global economy that’s making it easier for consumers and businesses to repay loans. Citigroup released $673m in loan-loss reserves set aside in earlier years.
Profit was also boosted by improving results in a portfolio of unwanted assets the bank has marked for sale. Losses in the Citi Holdings unit where the bank keeps those assets narrowed to $284 million in the first quarter from $804m a year earlier.
Corbat was dealt a setback to his turnaround plan last month when Citigroup failed an annual stress test administered by the Federal Reserve, which cited deficiencies in the bank’s ability to project revenue and losses in its global operations.
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