NEW YORK — Citigroup provided more evidence Monday that the nation’s big banks may have turned a corner. The bank reported a surprise first-quarter profit as trading revenue offset losses from failed loans.
Citi said it earned $4.4 billion after payment of preferred dividends, compared with a loss of $696 million a year earlier. It was the bank’s biggest quarterly profit since the second quarter of 2007.
The company cited strong trading of bonds, stocks and other securities for its big profit. Citigroup, one of the hardest- hit banks during the credit crisis and recession, said losses from bad loans fell for the third consecutive quarter. It also set aside less money for loan losses.
“Loan losses coming down with growth of top-line revenue speaks to the overall recovery,” said Oliver Pursche, executive vice president at Gary Goldberg Financial Services.
Citigroup earned 15 cents per share on revenue of $25.4 billion. That easily beat analysts’ expectations of a slight loss, according to Thomson Reuters.
Citigroup’s strong showing follows similarly impressive results last week by Bank of America and JPMorgan Chase.
Michael Williams, director of research at Gradient Analytics, said Citi’s balance sheet is “very healthy.” The bank’s reserves for future losses are stronger than other banks such as JPMorgan Chase and Bank of America, which provides it better protection moving forward, Williams said.
“They’re the brightest of all the big banks these days” because of their strong balance sheet, Williams said.
