One year after CEO Jane Fraser launched a business revamp, Citigroup reported lower revenue, higher expenses and a big reserve for loan losses in Russia. Yet the company’s long-term plan to streamline operations and invest in high-performing businesses — all with an aim to strengthen shareholder returns — still appears on track.

The Detroit company’s first-quarter results were highlighted by a 14% increase in car-loan originations. While executives expect credit quality to start normalizing, they also say that demand for vehicles will remain robust, with an estimated 4 million-5 million consumers still waiting on the sidelines.

The Pittsburgh bank had warned that business activity in its capital markets unit was slowing because of economic uncertainty stemming from Russia’s invasion of Ukraine. But its fee income declined by more than the company anticipated in the first quarter, and looming rate hikes from the Fed will no doubt cut into mortgage income further.

U.S. Bancorp and Wells Fargo both reported robust business loan volumes during the first quarter, while other large lenders reported smaller gains. Inflation is fueling more spending on technology, and companies are catching up on capital expenditures that they deferred earlier in the pandemic, according to bank executives.

Wells Fargo missed analysts’ expectations on first-quarter revenue and expenses as Chief Executive Charlie Scharf continues to face challenges turning around the bank after years of scandals.

Despite better-than-expected trading results, Citigroup reported a 46% decline in first-quarter earnings stemming largely from soaring noninterest costs and a $1.9 billion provision for souring loans tied to Russia.

CEO Jamie Dimon cited elevated risks related to inflation and the war in Ukraine as the nation’s largest bank added $902 million in loan-loss reserves. “Does this represent conservatism in an uncertain macro environment or something more onerous?” one analyst asked.

Mike Roffler, the San Francisco bank’s incoming chief executive, says he’s not shifting strategy. During the first quarter, the company leaned on its mortgage business, where customers moved to lock in refinancings before interest rates rose.

The loss was driven by “funding spread widening as well as credit-valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties,” the company said. 

Progressive groups once again are forcing shareholder votes in connection with hot-button issues such as racial equity and climate change. But now conservative groups are also harnessing the same process in an effort to influence the positions that banks take on politically charged issues.

Higher interest rates are generally helpful to the industry, but they are also leading to unrealized losses in banks’ bond portfolios. Trust banks such as Bank of New York Mellon, State Street and Northern Trust may take relatively large hits when they announce their first-quarter results.

Increased interest income would boost banks’ lending profitability, but inflation and mounting expenses, along with the specter of potential recession, loom large.

In response to the war in Ukraine, the custody bank is no longer pursuing new business in Russia. Citigroup, JPMorgan Chase and Goldman Sachs have all announced similar moves.

Pay for the leaders of Canada’s five largest banks rose an average of 28% as the lenders’ earnings increased and shares gained.

The Canadian banking giant cited labor shortages, rising inflation and the economic fallout from Russia’s invasion of Ukraine as reasons for keeping loan-loss allowances above pre-pandemic levels.

Toronto-Dominion Bank, which earlier this week announced a $13.4 billion acquisition to expand in the U.S., got a lift from loan growth at home.

Citigroup said profitability will fall as the bank pursues a strategy shift that it said will raise expenses in the near term.

Bank of Nova Scotia and Bank of Montreal got an earnings boost with commercial clients ramping up their borrowing as economies emerged further from the pandemic.

Block, the digital payments firm run by Jack Dorsey, reported strong quarterly sales that were in line with expectations but failed to impress investors.

Royal Bank of Canada is still benefiting from the pandemic-era boom in capital markets.