Citigroup Inc. (C), America’s fourth-largest asset bank, said that with President Donald Trump’s cut in corporate tax rates, tax revenues fell, and stock trading income rebounded with market volatility, profit in the first quarter climbed 13%. It is sluggish in 2017.
The bank said in a statement on April 13th that net income increased to US$4.62 billion from US$4.09 billion in the same period last year. Adjusted earnings per share climbed to $1.68, surpassing the average analyst estimate of $1.61 in a survey conducted by database provider FactSet.
Like Wall Street rival JPM, Citigroup benefited from Trump’s tax cuts as its corporate tax rate fell from 31% to 24%. According to the Responsive Political Center, Citi has lobbied for the new bill.
As traders speculated that the Fed’s interest rate hikes, the trade tensions between the US and China, and the data privacy scandal of Facebook Inc. (FB), the bank also benefited from the recovery of the stock market volatility. The key indicator of the market volatility of the Cboe Volatility Index VIX The average increase of 43% in the quarter.
The volatility rekindled investors’ weakness last year, as the unusually quiet market kept investors on the sidelines and Wall Street Bank’s traders did not have the opportunity to make gains from sharp fluctuations.
Citigroup’s stock trading revenue increased by 38% to US$1.1 billion, while fixed-income trading revenue decreased by 7% to US$3.42 billion.
Earlier Friday, JP Morgan Chase, the largest bank in the United States, said that its first-quarter profit rose by 35%, thanks to tax cuts and improved trade performance.
Citigroup’s other Wall Street rivals – Bank of America (BAC), Goldman Sachs Group (GS) and Morgan Stanley (MS) – will announce their results next week.