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Big banks beat forecasts
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April 17, 2000: 10:43 a.m. ET
Citigroup, Bank of America exceed 1Q expectations in robust economy
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NEW YORK (CNNfn) - Citigroup Inc., the biggest U.S. financial services company, Monday reported first-quarter earnings that beat Wall Street forecasts as the company's lending and consumer finance businesses benefited from the robust pace of the economy.
Separately, Bank of America Corp., the second-biggest U.S. bank holding company, said its first-quarter profits rose 17 percent, lifted by trading, investment banking, and investments in start-up companies.
Citigroup posted operating income of $3.6 billion, or $1.04 a diluted share. Analysts surveyed by First Call had projected only 78 cents a share in profit for the period. In the year-earlier period it made $2.4 billion, or 69 cents a share, excluding one-time items.
 Income from its Citibank operations in North America rose 92 percent to $138 million, while total banking income gained 27 percent to $610 million. Insurance income rose 12 percent to $381 million, while corporate and investment banking income gained 36 percent to $1.8 billion.
"Our very strong first quarter provides tremendous momentum to our fiscal year, with all of our businesses realizing the full advantage from favorable business conditions worldwide," said Sandy Weill, chairman and co-chief executive of the company.
Bank of America tops estimates
Charlotte, N.C.-based Bank of America, which has $633 billion in assets and more than 4,500 branches in 21 U.S. states, earned net income of $2.24 billion, or $1.33 per diluted share, in the first three months of the year, up from $1.91 billion, or $1.08 a diluted share, in the prior year quarter.
Analysts polled by First Call had expected the bank, formed from the merger of San Francisco-based BankAmerica and Charlotte's NationsBank, to earn $1.24 a share in the quarter.
Wall Street banks and brokerages involved in securities businesses profited during the latest quarter as investors flooded their trading desks with buy orders, and companies all over the world scrambled to strike merger deals and issue stock, boosting underwriting activity to near-record levels.
Still, the most recent quarter may be the last for record earnings among the country's financial institutions, cautioned analysts. Rising interest rates and a decline in underwriting activity could lead to less at the bottom line, according to Steve Eisman, a banking analyst with CIBC World Markets.
"The underwriting cycle is rolling over right now, which probably means we'll see a second quarter that isn't as strong as the first," he said.
Shares of Dow component Citigroup (C: Research, Estimates) rose 11/16 to 58-11/16 in midmorning trade. Bank of America (BAC: Research, Estimates) stock gained 3/4 to 50-11/16. 
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