Citigroup’s first quarter profit falls 27 per cent

Citigroup’s first quarter profit fell 27 per cent as the bank took charges related to its reorganization, although it beat expectations as revenues grew in key divisions.

The bank’s shares were volatile, wiping out an earlier gain to slide 2 per cent while other bank stocks also weakened.

Citi’s net income fell to $3.4 billion, or $1.58 per share, in the three months ended March 31, the bank said on Friday, above Wall Street expectations, according to LSEG data. The stock showed a mixed reception.

CEO Jane Fraser outlined further plans on Friday to turn around the company by reducing bureaucracy, cutting staff and focusing on key businesses that serve some of the world’s biggest corporations. The overhaul is aimed at making Citi more competitive with rivals including JPMorgan Chase and Wells Fargo, where earnings also exceeded forecasts.

Citi predicted its revenue would rise 1.8 per cent to 3 per cent this year to between $80 billion and $81 billion.

The gains will come after the bank reduced its workforce by 7,000 employees and took $483 million in charges in the first quarter related to severance and a payment into a Federal Deposit Insurance Corp fund.

Most of the layoffs were concluded in the first quarter, generating an expected $1.5 billion of cost savings, Fraser told analysts on a conference call. Additional cuts could save as much as $2.5 billion a year in the medium term.

Citigroup is still working to unwind operations in markets such as Russia.