Citigroup's first-quarter profits down 11%

17 April 2007

Citigroup has announced an 11 per cent downturn in profits as costs of restructuring impacted its performance and cut into impressive revenue growth.

The drop in net income to $5.01 billion, or $1.01 per share, compared with $5.64 billion for the same period last year, or $1.12 per share, meant that the company's performance declined for the third consecutive quarter.

Meanwhile, revenue rose 15 per cent to $2.25 billion - its most rapid increase for three years, while adjusted expenses increased by only ten per cent.

However, an estimated one-off charge of $871 million for the company's strategic repositioning and for redundancy payments from the expected 17,000 job cuts worldwide eliminated the gains made by the company.

News of the company's first-quarter performance comes as it last week announced it was to acquire India-based hedge fund Old Lane and appoint its co-founder in charge of overseeing Citigroup's real estate and hedge fund divisions.

The restructuring programme being undertaken by Citigroup's chief executive Charles Prince follows criticism over the bank's strategy and diminished stock market performance.

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