Citigroup Inc. has reported record net income for the first quarter of 2005 of $5.44 billion, or $1.04 per share, both increasing 3% from the first quarter of 2004. Income from continuing operations was $5.17 billion, or $0.99 per share, both increasing 3% from the first quarter of 2004. Income from continuing operations excludes the results of substantially all of Life Insurance and Annuities and the Argentine pension business, which are subject to a pending sale transaction.
First quarter results include a $272 million after-tax charge for repositioning costs, comprised of $151 million in Corporate and Investment Banking, $95 million in Global Consumer, $22 million in Global Wealth Management and $4 million in Asset Management. Results also include a $109 million after-tax loss on the sale of manufactured housing loans, a $111 million after-tax gain on the sale of a transportation finance business and a $72 million after-tax gain relating to the resolution of previously disclosed litigation involving Golden State Bancorp.
The Board of Directors of Citigroup has authorized management to repurchase up to an additional $15 billion of its common stock. Combined with a remaining authorization of $1.3 billion, the total authorization is $16.3 billion.
âWe are proud of our record global earnings, driven by the strength and diversity of our global franchises. As we have seen in prior quarters, weakness in certain products or regions was more than offset by strength in others. We achieved strong growth in customer balances, which helped to offset the impact of spread compression from rising short-term rates. Our fixed income and transaction services businesses performed exceptionally well, both achieving record revenues. Our results also include the impact of repositioning costs, which reflect expense discipline and ongoing consolidation activities to improve operating efficiencies,â said Charles Prince, Chief Executive Officer of Citigroup.
âOur focus on disciplined capital allocation led to the announced sale of substantially all of Life Insurance and Annuities and the sale of a portfolio of manufactured housing loans. We continued to allocate resources to expand our growth franchises through branch expansion, advertising, technology and people. We closed the acquisition of First American Bank, providing an important presence in the attractive Texas retail banking market. All of these actions reflect a sharpened focus on Citigroupâs long-term growth franchises and a rigorous approach to the use of shareholdersâ capital,â said Prince.
âCitigroupâs businesses continue to generate industry-leading returns and, as a result, substantial capital. Over the past nine months, we have significantly strengthened our capital ratios. Considering our strong capital generation, and with confidence in the strength of our businesses, the Board has authorized management to repurchase up to an additional $15 billion in common shares. The authorization provides management with flexibility to achieve an appropriate balance between growth for our franchises and returning capital to shareholders through dividends and buybacks. We expect to execute up to $15 billion in share repurchases over 18 months,â said Prince.
âIn addition, in the first quarter we launched our Five Point Plan, which marked the beginning of a very important chapter in Citigroupâs history. The Plan strengthens a foundation of values, priorities and internal controls that are essential for sustained long-term growth. Implementation of the Plan is our top priority,â said Prince.
FIRST QUARTER HIGHLIGHTS
In North America retail banking, average deposits and loans grew 6% and 19%, respectively. Internationally, retail banking deposits and loans increased 17% and 43%, respectively. North America cards receivables increased 3% as sales growth was offset by higher payment rates. In international cards, sales increased 30% and receivables grew 23%. Smith Barney net client flows were the strong