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. Last Updated: 07/27/2016

Citigroup Rides Retail to $4.1Bln Net

NEW YORK -- Buoyed by strong retail banking performance, Citigroup on Monday reported first-quarter earnings above analysts' expectations.

Profits also rose at Bank of America Corp. in Charlotte, North Carolina, and were well above projections.

Citigroup, the largest U.S. financial institution, said net income totaled $4.1 billion, or 79 cents per share, in the first quarter. That was above the 77 cents expected by analysts surveyed by Thomson First Call.

The first-quarter results at the New York-based company compared with net income of $4.84 billion, or 93 cents per share, a year earlier. At that time, Citigroup still owned Travelers Property Casualty Corp., which it spun off last year.

Excluding the Travelers' income and a $47 million charge for an accounting change, income in the first quarter of 2002 was $3.48 billion, or 66 cents per share.

Citigroup chairman and chief executive Sanford Weill said in a statement accompanying the report that he felt the bank was in "an exceptionally strong competitive position, which enabled us to deliver outstanding first-quarter results despite an environment of significant political and economic uncertainties."

He noted that a number of business lines produced double-digit income growth, especially the global consumer division that includes credit cards and retail banking.

Weill said he expected further retail banking growth in the future in part because of the strong performance of Golden State Bancorp, which Citigroup acquired last November.

The only division to report a drop in income was private client services, which Citigroup said reflected lower fees and commissions amid weak market performance.

The bank said its reserves against losses were $11.6 billion for the first quarter, down $52 million from the fourth quarter. Revenues totaled $18.54 billion in the first quarter, an increase of more than 4 percent from $17.8 billion a year earlier.

Fueled by a 21 percent increase in consumer loans, Bank of America reported first-quarter earnings of $2.42 billion, or $1.59 per share, up from $2.18 billion, or $1.38 per share, a year earlier.

That easily beat the $1.48 per share expected by analysts surveyed by Thomson First Call.

The bank's shares were down 24 cents at $71.10 in early trading on the NYSE.

The Charlotte, North Carolina, bank -- the No. 3 U.S. bank in assets behind Citigroup and J.P. Morgan Chase & Co. -- benefited from historic low interest rates on mortgages, which have boosted refinancings and home purchases.

Ken Lewis, chairman and chief executive, said all three of the bank's major businesses increased profits in the first quarter.

Credit losses improved, the bank said, and its loan loss provision dropped to $833 million from $840 million a year earlier.

The bank began expensing employee stock options this quarter and reported a pretax impact of $26 million.

Revenue rose to $8.89 billion, up 3.5 percent from $8.59 billion in the first quarter of 2002.

FleetBoston, based in Boston, said profit from continuing operations fell 22 percent to $577 million, or 55 cents per share, meeting analysts' estimates.

The bank wrote off $200 million of bad Argentina loans and is trying to cut risks and costs as it refocuses on its consumer bank and loan business.