11:34 AM EDT, 04/12/2024 (MT Newswires) -- Citigroup ( C ) reported less-than-expected declines in fiscal first-quarter results on Friday amid a 49% revenue surge in its banking business that was partially offset by the impact of restructuring costs and an incremental Federal Deposit Insurance Corp. special assessment.

Revenue dipped to $21.1 billion for the three months ended March 31 from $21.45 billion a year ago but topped the $20.4 billion average analyst estimate on Capital IQ. Earnings per share dropped to $1.58 from $2.19 but beat the Street's $1.17 view.

The 2% decline in revenue reflects the divestiture of Citigroup's ( C ) India consumer business last year. Excluding that impact, sales climbed 3% on an annual basis, with gains driven across banking, US personal banking and services, partially offset by declines in markets and wealth, respectively. Investment banking soared 35% year over year as improved market sentiment led to higher debt and equity issuances.

"Services continues to perform well and generate very attractive returns," Chief Executive Jane Fraser said in a statement. "Markets bounced back from a tough final quarter in (2023) with good client activity in equities and spread products. The rebound in Banking gained speed where near-record levels of investment grade debt issuance helped increase revenues by 49%."

Net interest income edged up 1% year over year to $13.51 billion but was short of the $13.62 billion market view, according to Capital IQ data. Citigroup's ( C ) provision for credit losses on loans jumped 39% from the first quarter of 2023 to $2.42 billion.

Operating expenses grew 7%, reflecting $258 million in "repositioning costs" largely related to efficiency efforts and an incremental $251 million special assessment fee to the FDIC to help the regulator recover losses tied to bank failures last year. During the first quarter, Citigroup ( C ) executed a total headcount reduction of roughly 7,000. The bank reiterated its expectation that restructuring efforts will result in $2 billion to $2.5 billion of annualized run rate savings over the medium term.

"Last month marked the end to the organizational simplification we announced in September," Fraser said. "The result is a cleaner, simpler management structure that fully aligns to and facilitates our strategy."

Citigroup ( C ) continues to forecast full-year revenue of $80 billion to $81 billion and expenses in the $53.5 billion to $53.8 billion range in the ongoing year. The Street was modeling for 2024 revenue of $80.15 billion.

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