Citi Beats Earnings Estimates And The Stock Is Rising
Citi beat earnings expectations with a non-adjusted earnings per share of $1.30 and revenues of $20.1 billion. In Q1, analyst expect earnings per share to come in at $1.14 with a quarterly revenue of $19.7 billion, according to data compiled by Bloomberg.
The bank also reporter a profit of $3.94 billion, up slightly from $3.81 billionat the same time last year. The stock is up 2.85% in premarket trading.
It's safe to say that Citi has had the roughest 2014 of all the largest Wall Street banks. Two events have been most damaging. First Citi's Mexican subsidiary was accused of defrauding clients and suspicious money laundering activity. And second the Fed deemed the bank unfit to return capital to shareholders due to a poor risk management strategy.
Needless to say, analysts across Wall Street have not been happy about that.
"I'm adamant that Citi cannot afford to have business as usual," CLSA's Mike Mayo told Business Insider. "Investors will be more furious if Citi treats the value of the stress test as simply a delay in the strategy that they had already planned."
Many still see a lot of upside in the bank's strategy over the next two years, though. It's just that without the Fed's approval, it's going to be hard to make shareholders happy. CEO Michael Corbat addressed that in his statement Monday morning.
"Despite a quarter that was difficult for our company, we delivered strong results," said Corbat..."Very cognizant of our shareholders desire to see a sustainable return of capital, we are engaged with the Fed to better understand their expectations regarding the CCAR process. We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach. I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal," Mr. Corbat concluded.
Meanwhile, the issue of CEO pay is also getting a lot of attention at the bank once again. Back when Vikram Pandit was in charge, shareholders voted against his $14.9 million pay package. This year two proxy firms are urging shareholders to vote against the company's executive pay package. They'll slug that out at Citi's annual meeting in St. Louis on April 22nd.