- 18Mar
(Reuters) - Citigroup Inc's first-quarter profit fell 32 percent as bond trading revenue plunged and operating expenses jumped.
The results were better than analysts expected, but the bank's shares were flat in premarket trading.Citigroup generated profit in large part because it dipped into funds previously set aside to cover bad loans, releasing $3.37 billion of reserves.
Revenue fell 22 percent to $19.7 billion, and operating expenses rose 7 percent, in part because of higher legal costs.
"The numbers look OK relative to expectations, but it's a tough slog. I think the tepid loan growth is just confirmation of the expectations people have," said Michael Holland, chairman of money manager Holland & Co.
Citigroup said it earned $3.0 billion, or 10 cents per share, down from $4.4 billion, or 15 cents per share, a year earlier.
Analysts on average had expected 9 cents per share, according to Thomson Reuters I/B/E/S.
It is the fifth consecutive quarterly profit for Citigroup, which is slowly recovering after taking $45 billion in U.S. bailouts during the financial crisis.
By the end of 2010, the government had shed its common shares in Citigroup, and the bank reported its first annual profit since 2007.
Like rivals JPMorgan Chase & Co and Bank of America Corp, Citigroup is struggling to grow its revenue in a volatile trading environment and amid weak demand from creditworthy borrowers for new loans.
In its securities and banking group, fixed income trading revenue fell 29 percent to $3.8 billion.
Citigroup shares were unchanged at $4.42 in premarket trading.
(Reporting by Maria Aspan; additional reporting by Joe Rauch in Charlotte; editing by John Wallace)
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