First Quarter 2022 – Results demonstrated continued progress across the franchise As described later throughout this executive summary, during the first quarter of 2022:
• Citi's revenues declined 2% versus the prior-year period, as higher net interest income-driven by Services, in
Institutional Clients Group(ICG), and Personal Banking and Wealth Management (PBWM)-was more than offset by lower non-interest revenue across businesses. • Citi continued to invest in its risk and control environment, modernize its systems and technology infrastructure and make business-led investments, which include attracting front office talent, developing integrated solutions and enhancing product capabilities that improve the digital client experience and add scalability. • Citi had a modest allowance for credit losses (ACL) release in the quarter that included a build of approximately $1.9 billionrelated to Citi's exposures in Russiaand the impact of the war in Ukraineon the broader macroeconomic environment (for additional information, see "Cost of Credit" below). • Citi had solid year-over-year loan and deposit growth across ICG and PBWM, reflecting continued engagement across both corporate clients and consumers. • Citi repurchased approximately 50 million common shares and returned approximately $4 billionof capital to common shareholders in the form of repurchases and dividends. • Citi continued to make progress with its refresh strategy, including entering into sale agreements for an additional seven consumer banking franchises in Asiaand EMEA, for a total of 9 of 14 exit markets signed and announced, with a clear wind-down path for Korea.
Various geopolitical and macroeconomic challenges related, among others, to the war of
Summary of first quarter 2022 results
Citigroup reported net income of
$4.3 billion, or $2.02per share, compared to net income of $7.9 billion, or $3.62per share in the prior-year period. The decrease in net income was driven by higher cost of credit, higher expenses and lower revenues. Citigroup's effective tax rate was 18% versus 23% in the prior-year period, reflecting the resolution of certain tax audit items. Earnings per share decreased 44%, reflecting the decrease in net income, partially offset by a 6% decline in shares outstanding. Citigroup revenues of $19.2 billiondecreased 2%, as higher net interest income driven by ICG and PBWM was more than offset by lower non-interest revenue across businesses. Citigroup's end-of-period loans were $660 billion, down 1% from the prior-year period, as growth in ICG and PBWM (up 6% and 4%, respectively) was more than offset by lower loans in Legacy Franchises, primarily reflecting the reclassification of loans to Other assets to reflect held-for-sale accounting as a result of the signing of sale agreements for consumer franchises in Asiaand EMEA. Citigroup's end-of-period deposits increased 3% to $1.3 trillion, driven by increases in both PBWM and ICG.
Citigroup operating expenses of
after tax) due to re-segmentation and the timing of disposals. These costs related to the sale of Asia Consumer were accounted for under the old franchises. Excluding costs related to the Asia Consumer divestiture, operating expenses increased 10%, driven by continued investment in Citi’s transformation, business-led investments and related expenses to volume, partially offset by productivity gains (as used in this Form 10-Q, Citi’s results of operations and financial condition excluding the impact of costs related to the Asia Consumer divestiture are non-financial measures GAAP).
Cost of Credit Citi's total provisions for credit losses and for benefits and claims was a cost of
$0.8 billion, compared to a benefit of $2.1 billionin the prior-year period. The higher cost of credit was driven by a lower ACL release ( $0.1 billionversus $3.9 billionin the prior-year period), partially offset by lower net credit losses. The net ACL release included a $1.9 billionACL build, consisting of approximately $1 billionrelated to Citi's exposures in Russiaand approximately $900 millionrelated to the impact of the war in Ukraineon the broader global macroeconomic environment. This build was more than offset by an ACL release related to a COVID-19 uncertainty reserve, primarily in U.S.Personal Banking. For additional information on Citi's ACL, see "Significant Accounting Policies and Significant Estimates-Citi's Allowance for Credit Losses (ACL)" below. Net credit losses of $0.9 billiondecreased 50%. Consumer net credit losses of $841 milliondecreased 46%, primarily reflecting improved delinquencies in both the 3
Branded Cards and Retail Wallets
Citigroup’s Common Equity Tier 1 (CET1) ratio was 11.4% at
Institutional Clients GroupICG net income of $2.6 billiondecreased 51%, primarily driven by higher expenses, higher cost of credit and slightly lower revenues. ICG operating expenses increased 13% to $6.7 billion, reflecting continued investments in Citi's transformation, business-led investments and volume-related expenses, partially offset by productivity savings. ICG revenues of $11.2 billiondecreased 2%, largely driven by Banking, partially offset by an increase in Services revenue. Services revenues of $3.4 billionincreased 15%, primarily from TTS revenues of $2.6 billion, which increased 18%, driven by net interest income on higher deposit balances and spreads as well as strong fee growth. Securities services revenues of $858 millionincreased 6%, as net interest income grew 17%, driven by higher interest rates across currencies, and fee revenues grew 2%, due to higher assets under custody. Markets revenues of $5.8 billionwere down 2%, versus a very strong quarter in the prior-year period. In the current quarter, activity levels benefited from client repositioning and strong risk management, driven by the Federal Reserve'sinterest rate increases and overall geopolitical and macroeconomic uncertainty. Fixed income markets revenues of $4.3 billiondecreased 1%, as strong client engagement in FX, commodities and rates was offset by less activity in spread products. Equity markets revenues of $1.5 billionwere down 4%, compared to a very strong quarter in the prior-year period, reflecting strong equity derivatives performance and growth in prime finance balances. Banking revenues of $1.9 billiondecreased 23%, including the gain (loss) on loan hedges. Excluding the gain (loss) on loan hedges, Banking revenues decreased 32% versus the prior-year period, as heightened geopolitical uncertainty and the overall macroeconomic backdrop reduced activity in debt and equity capital markets. Investment banking revenues decreased 43% due to lower capital markets activity, partially offset by growth in advisory. Corporate lending revenues of $689 milliondecreased 6% (excluding gain (loss) on loan hedges), primarily driven by lower average loans. For additional information on the results of operations of ICG for the first quarter of 2022, see " Institutional Clients Group" below. Personal Banking and Wealth Management PBWM net income of $1.9 billiondecreased 23%, largely driven by lower revenues, higher expenses and a lower net ACL release. PBWM operating expenses of $3.9 billionincreased 14%, driven by transformation and business-led investments, and higher volume-driven expenses, partially offset by productivity savings. PBWM revenues of $5.9 billiondecreased 1%, as higher net interest income was more than offset by lower non-interest revenue. U.S.Personal Banking revenues of $4.0 billiondecreased 1%, with lower revenues across Branded cards and Retail banking. Branded cards revenues of $2.1 billiondecreased 1%, due to higher payment rates and higher acquisition and rewards costs, reflecting increases in new accounts and customer engagement. Retail services revenues of $1.3 billionwere largely unchanged, as higher net interest income was offset by higher partner payments, driven by lower net credit losses. Retail banking revenues of $595 milliondecreased 6%, largely driven by lower mortgage originations. Global Wealth Management revenues of $1.9 billiondecreased 1%, primarily due to lower client activity in investments, particularly in Asia. For additional information on the results of operations of PBWM for the first quarter of 2022, see "Personal Banking and Wealth Management" below.
Former franchises The net loss of the former franchises was
The Corporate/Other net result was
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