Citi beats revenue estimates, exiting consumer franchises in 13 markets

Citigroup Inc., reported net income for the first quarter 2021 of $7.9 billion on revenues of $19.3 billion. This compared to net income of $2.5 billion on revenues of $20.7 billion for the first quarter 2020, according to a company release.

Revenues decreased 7% from the prior-year period, as higher revenues in investment banking and equity markets were more than offset by lower rates, the absence of prior year mark-to-market gains on loan hedges within the Institutional Clients Group, and lower card volumes in Global Consumer Banking. Net income of $7.9 billion increased significantly from the prior-year period driven by the lower cost of credit.

"It's been a better than expected start to the year, and we are optimistic about the macro environment. We are committed to serving our clients through the recovery and positioning the bank for a period of sustained growth," Jane Fraser, Citi CEO, said in the release.

"We reported record net income driven by strong performance in our Institutional Clients Group and a significant release from our Allowance for Credit Losses, as a result of the improving economic outlook. While Global Consumer Banking revenues were down quarter-over-quarter as a result of the pandemic, this is the healthiest we have seen the consumer emerge from a crisis in recent history," Fraser said.

Strategic Actions: Global Consumer Banking
Citigroup announced strategic actions in Global Consumer Banking — as part of an ongoing strategic review — which will allow Citi to direct investments and resources to the businesses where it has the greatest scale and growth potential. Citi will focus its Global Consumer Bank presence in Asia and EMEA on four wealth centers — Singapore, Hong Kong, the UAE and London. As a result, Citi intends to exit consumer franchises in thirteen markets across the two regions.

The affected businesses include the consumer franchises in Australia, Bahrain, China, India, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam. Citigroup's Institutional Clients Group will continue to serve clients in these markets, which remain important to Citi's global network.

"As a result of the ongoing refresh of our strategy, we have decided that we are going to double down on wealth," said Fraser. " We will operate our consumer banking franchise in Asia and EMEA solely from four wealth centers, Singapore, Hong Kong, UAE and London. This positions us to capture the strong growth and attractive returns the wealth management business offers through these important hubs.

"While the other 13 markets have excellent businesses, we don't have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia. We will continue to update you on strategic decisions as we make them while we work to increase the returns we deliver to our shareholders," Fraser said.