Citing increased international growth, Citigroup Inc. on April 18 reported an $864 million profit for its Citi-branded credit card operation for the first quarter ended March 31, up 397% from $174 million during the same period a year earlier.
Revenue, however, decreased 7%, to $4 billion from $4.3 billion.
Overall purchase volume for Citi-branded cards during the quarter was $64.9 billion, up 8% from $60.1 billion a year earlier. The total number of cards in circulation increased 0.8%, to 51.7 million from 51.3 million.
The charge-off rate across all regions at the end of March was 6.73%, down 323 basis points from 9.96% a year earlier.
Consumer net credit losses were down both domestically and internationally “on both a dollar and rate basis in the first quarter,” John Gerspach, Citi chief financial officer, said during a conference call with analysts to discuss the quarter’s earnings.
In North America, Citi-branded cards generated income of $460 million, a significant change from a $150 million loss a year earlier, while revenue decreased 16%, to $2.1 billion from $2.5 billion. Purchase volume increased 0.3%, to $36.3 billion from $36.2 billion. Citi had 21.1 million open credit card accounts at the end of March, down 3.2% from 21.8 million a year earlier. The charge-off rate in North America was 7.42%, down 325 basis points from 10.67%.
The Latin America region generated income of $179 million, up 34.6% from $133 million. The region’s revenue increased 9.2%, to $961 from $880 million. Purchase volume was $9.1 billion, up 24.7% from $7.3 billion. Citi had 12.7 million open accounts in Latin America at the end of the quarter, up 5% from 12.1 million a year earlier. The charge-off rate in the region was 9.2%, down 481 basis points from 14.01%.
In Asia, Citi-branded cards generated income of $180 million, up 13.9% from $158 million, while revenues increased 9.4%, to $748 million from $684 million. Purchase volume was $17.2 billion, up 18.6% from $14.5 billion. Citi had 15.4 million cards in circulation in Asia at the end of March, up 4.1% from 14.8 million a year earlier. The charge-off rate in Asia was 3.01%, down 152 basis points from 4.53%.
“India continued to show the most significant improvement in net credit losses, while in Latin American net credit losses also improved driven y Citi’s Mexico portfolio,” Gerspach noted.
Mexico represents 40% of both Citi’s annual revenue and the company’s revenue stream in Latin American cards, he added.
Citi’s Europe, Middle East and Africa unit generated income of $45 million, up 36.4% from $33 million, while revenue decreased 2.2%, to $179 million from $183 million. Purchase volume rose 9.5%, to $2.3 billion from $2.1 billion. Citi had 2.5 million open card accounts in the region at the end of March, down 3.8% from 2.6 million a year earlier. The charge-off rate on cards in the region was 3.64%, down 335 basis points from 6.99%.
Citi Holdings’ revenue from retail partner cards during the quarter was $1.74 billion, down 21.3% from $2.21 billion. Purchase volume was $16.3 billion, down 12.8% from $18.7 billion. Citi had 86.5 million open private-label retail card accounts at the end of March, down 9% from 95.1 million a year earlier. The charge-off rate on retail partner cards was 10.29%, down 343 basis points from 13.72%.
Citi as a company reported first quarter net income of $3 billion, down 31.8% from $4.4 billion during the same period last year. Revenues totaled $19.8 billion, down 22% from $25.4 billion.
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