Two of the US' key banks have surprised markets with stronger-than-expected earnings reports for the first quarter of the year - evidence that the banking business has more than recovered since the 2008 financial crisis.
Citigroup, the US' third-biggest bank by assets,posted its strongest first-quarter earnings
in nearly eight years on Thursday, buoyed by lower legal and restructuring costs.
The financial powerhouse netted $4.8 billion (4.47 billion euros), up some 21 percent from the same period last year. Investors welcomed the news, as shares rose 2.3 percent to $54.45 in trading on Thursday.
Strict cost-cutting measures and lower legal outlays, related to itscomplicity in the financial crisis
, saved the company some $700 million. Combined, these costs plunged to $403 million in the quarter ending March 31 from $1.16 billion the year before. Overall, operating expenses were down 10 percent to $10.9 billion.
This comes as Citi is parting with its consumer businesses in several countries abroad, including the Czech Republic, Hungary, Japan and Turkey.
"While some businesses faced revenue headwinds, we grew loans and deposits in our core businesses and gained wallet share among our clients," chief executive Michael Corbat said in a statement on Thursday.
Citigroup's biggest setback, however, was the drop in revenue from fixed income trading, which fell 11 percent to $3.48 billion.
This stood in stark contrast to Goldman Sachs' earnings, also posted on Thursday. The US' largest investment bank more than beat markets' expectations, when it reported its best quarter since the financial crisis, with strong results across the board. A strong performance in mergers and acquisitions, stock offerings and investment banking added $2.8 billion to its net income - up nearly 40 percent year-on-year - while revenue shot up 14 percent to $10.6 billion.
The earnings translated into $5.94 per share, much higher than Wall Street analysts' projections of $4.26.
"Given more normalized markets and higher levels of client activity, we remain encouraged about the prospects for continued growth," Goldman chief executive Lloyd Blankfein said.
pad/bk (AP, AFP, dpa, Reuters)