Citigroup Inc (NYSE:C) stock rose 1.56% (As on Apr 15, 7:58:31 AM UTC-4, Source: Google Finance) after the company posted a 46 per cent plunge in first-quarter profit as it took hits from provisions for Russia-related losses, a slump in underwriting fees and higher expenses. Net income fell to $4.30 billion, for the quarter to March 31, from $7.94 billion, a year earlier. Citigroup operating expenses of $13.2 billion in the first quarter 2022 increased 15%. Excluding the Asia Consumer divestiture-related costs, operating expenses increased 10%, driven by continued investments in Citi’s transformation, business-led investments and volume-related expenses, partially offset by productivity savings. Citigroup cost of credit of $755 million in the first quarter 2022 compared to $(2.1) billion in the prior-year period, as lower net credit losses were more than offset by a lower net release in the allowance for credit losses (ACL). The net release included a $1.9 billion ACL build related to Citi’s exposures in Russia and the broader impact of the conflict in Ukraine on the macroeconomic environment. Revenue from Treasury and Trade Solutions – Citi’s crown jewel business – rose 18 per cent due to higher net interest income and fee growth.

C in the first quarter of FY 22 has reported the adjusted earnings per share of $2.02, beating the analysts’ estimates for the adjusted earnings per share of $1.55, according to Refinitiv IBES data. The company had reported 2 percent fall in the adjusted revenue to $19.2 billion in the first quarter of FY 22, mainly due to a 43 per cent slump in investment banking revenue as last year’s rush of deals involving blank-check companies tapered off, drying up underwriting fees.

Additionally, Citi has been using any excess capital to buy back shares. Unlike other big banks, its stock trades at a discount to its net worth, making buybacks attractive. The bank returned $4 billion to shareholders in the quarter, including $1 billion in dividends, and its share count was 6 per cent lower than a year earlier. The repurchases came as Citi’s capital account was hurt by unrealized losses on securities as a result of the recent rise in interest rates. Its Common Equity Tier 1 capital atio fell to 11.4 per cent from 12.2 per cent in December. The bank has said it intends to have the ratio back up to 12 per cent by year-end.