Investors got a good look at the good news/bad news aspect of Citigroup's
For the first quarter, Citigroup posted a 6% revenue increase and a 3% increase in both income from continuing operations and EPS.
While the retail/consumer banking and fixed income businesses were quite strong and the transaction services business did pretty well, the capital markets and global wealth management businesses were pretty weak.
Wealth management was hit by lower client transaction volumes and the closing of the company's private bank in Japan, while higher costs in capital markets offset some real strength in fixed income and commodities trading.
In consumer finance and banking, the domestic credit card business was hurt by net interest margin compression, while the international business grew strongly. With banking, results in the U.S. were also hurt by a lower net interest margin, but lower expenses and increases in deposits and loans led to a strong overall result.
Looking ahead, investors need to realize that Citigroup is more likely to focus on solid slow-growth initiatives and internal improvements instead of flashy acquisitions. Not only would further large acquisitions probably cause headaches with regulatory overseers, but as big as Citigroup is, it would be tough to find many good deals that would move the needle in any meaningful way.
But that's not to say that Citigroup doesn't have its charms. Mid-single-digit revenue growth and somewhat higher earnings growth might not be exciting, but it will lead to copious amounts of free cash flow. In addition to paying what is already a pretty healthy dividend, Citigroup management announced an additional $15 billion share buyback authorization that it hopes to execute over the next 18 months.
Whether you're a growth investor or a value investor, it's hard not to appreciate that sort of commitment to returning capital to shareholders.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).