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Citigroup profit jumps as legal, restructuring costs fall
[NEW YORK] Citigroup Inc, the third biggest US bank by assets, reported a 16 per cent jump in quarterly profit as legal and restructuring costs plunged.
Citi has been cutting costs and simplifying its structure by selling retail operations in a number of countries, shrinking its US branch network and selling non-core businesses.
The bank's shares rose 2 per cent to US$54.33 in premarket trading on Thursday.
Legal and restructuring costs plunged to US$403 million in the first quarter ended March 31 from US$1.16 billion a year earlier.
Like other Wall Street banks, Citi has been hit by high legal expenses related to bad mortgage dealings and trading scandals in the aftermath of the financial crisis.
The bank has exited or is exiting consumer businesses in countries including Japan, Turkey, Czech Republic and Hungary.
Chief Executive Mike Corbat aims to use Citi's streamlined structure to return more capital to shareholders. He made progress toward that goal in March when the Federal Reserve approved his plans to raise dividends and buy back shares.
Citi's return on assets was 1.05 per cent in the first quarter, higher than Mr Corbat's target of at least 0.9 per cent for the year.
The bank's tier-1 common equity capital ratio rose to 11 per cent from 10.6 per cent in the fourth quarter as it used US$1.2 billion of deferred tax assets.
Adjusted net income rose to US$4.82 billion, or US$1.52 per share, from US$4.15 billion, or US$1.30 per share, a year earlier.
Analysts on average had expected earnings of US$1.39 per share, according to Thomson Reuters I/B/E/S.
It was not immediately clear if the figures reported were comparable.