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Last Updated: Monday, 14 April, 2003, 15:30 GMT 16:30 UK
Consumer business boosts Citigroup
Wall Street sign
Citigroup has reported profits at the top end of expectations as low US interest rates stimulated demand for loans and mortgages.

The financial giant said profits at its continuing operations were $4.1bn (2.6bn) during the January to March period, an 18% rise on the same period last year.

The increase was helped by rising profits at its consumer business and fewer bad loans.

Elsewhere on Wall Street, Bank of America reported an 11% rise in first quarter earnings to $2.42bn, also helped by growing consumer business.

Low rates

"Citigroup entered 2003 in an exceptionally strong competitive position which enabled us to deliver outstanding first quarter results despite an environment of significant political and economic uncertainties," said chairman and chief executive Sanford Weill.

The bank's consumer business has been helped by interest rate levels which are at their lowest level for nearly 40 years.

Low rates have triggered huge demand for borrowing and mortgages, and Citigroup saw profits from its consumer unit rise 26% from a year ago to $2.15bn.

Overall, revenue rose 4% to $18.5bn from $17.8bn.

Settlement close?

Along with several other Wall Street banks and brokerages, Citigroup has been accused of misleading investors by giving over-optimistic reports on companies in order to win investment banking business.

Regulators - led by New York Attorney General Eliot Spitzer - succeeded in reaching a $1.4bn settlement with Wall Street firms last September, which included a $400m payment from Citigroup.

The deal also called for banks to break the links between their research and investment banking units.

The exact terms of the settlement have yet to be reached, but recent reports have suggested that a final agreement could be announced this week.

Bank of America

Another Wall Street firm to benefit from low interest rates has been Bank of America.

It reported an 11% increase in first quarter earnings to $2.42bn, or $1.59 a share, helped by a strong performance from its consumer business.

Revenue came in at $8.89bn, a 4% rise on the same period last year.

Credit card income rose 18% to $681m and mortgage banking income more than doubled to $405m from 195m a year ago.

Citigroup allegations continue
13 Nov 02  |  Business
Citigroup separates research arm
30 Oct 02  |  Business
Citigroup pays record compensation
19 Sep 02  |  Business

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