Originally created 04/16/04

Citigroup reports record quarterly earnings

NEW YORK -- Citigroup, the nation's largest financial institution, reported Thursday that earnings rose 29 percent in the first quarter, soundly beating analysts' estimates.

The bank, based in New York, said net income totaled $5.27 billion, or $1.01 a share, in the January-March period, up from the $4.1 billion, or 79 cents a share, a year earlier.

The results included an after-tax gain of $180 million, or 3 cents a share, from the sale of part of Citi's electronic funds services business, the bank said.

The results exceeded by a wide margin the 94 cents expected by analysts surveyed by Thomson First Call.

On Wednesday, Citi's shares fell 25 cents to $50.95 on the New York Stock Exchange.

Chief executive officer Charles Prince said in a statement accompanying the report that he believed the bank was positioned "to capitalize on the continued strengthening of the global economy."

He noted especially strong growth in credit cards, private banking, and corporate and investment banking. He also cited improvement in Europe, Africa and the Middle East as well as in Asia, where Citi is buying a leading Korean bank, KorAm.

Prince also said the bank could weather higher interest rates. The Federal Reserve and central banks abroad are expected to begin raising rates later this year to counter inflationary pressures.

"As economies continue to strengthen around the world, we expect interest rates to increase," Prince said. "We have positioned the company to benefit as rates rise in the medium to long term."

Citi reported double-digit growth in all nine of its product lines.

Revenues in the first quarter were $21.49 billion, up 16 percent from $18.54 billion a year earlier.

Citi has more than 200 million customer accounts in the 100 nations in which it operates.

On Wednesday, Bank of America Corp., based in Charlotte, N.C., reported first quarter earnings above Wall Street analysts' expectations.

The bank said its net income totaled $2.68 billion, or $1.83 per share, in the January-March quarter, up 11 percent from a year earlier. Revenue rose 7 percent to $9.69 billion.

Bank of America, which recently acquired FleetBoston, will be the third largest bank in the nation after the J.P. Morgan Chase & Co. merger with Bank One is completed. The combined J.P. Morgan-Bank One will be second in size to Citigroup.

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