NEW YORK (CNNfn) - Citigroup Inc. and BankAmerica Corp., two of the nation's biggest financial services companies, reported first-quarter profits Monday that beat Wall Street forecasts.
Citigroup said net income rose 9.3 percent, citing strength in its global consumer banking business, a sharp turnaround in its investment banking operations, including record results at its Salomon Smith Barney unit, and strong growth in its asset management business.
BankAmerica said net income rose 44 percent from a year earlier, when results were depressed by a $642 million merger-related charge. Excluding the charge, earnings fell 3 percent but still topped forecasts on Wall Street.
The company, formed by NationsBank's merger with BankAmerica last year, is the nation's biggest pure banking company and the first coast-to-coast bank.
Another big bank, Bank of New York Co., said net income rose 11 percent, in line with analysts' estimates.
New York-based Citigroup said net income rose to $2.36 billion, or $1.01 a diluted share, in the quarter, from $2.16 billion, or 90 cents a share, a year earlier. Excluding $53 million in charges from restructuring and other items, Citigroup said profit hit a record $2.42 billion, or $1.04 a diluted share, topping forecasts of 87 cents a share, according to First Call, which tracks analysts' estimates.
The company, formed by the $70 billion merger of Citicorp and Travelers Group last year, also said it has taken steps to achieve $900 million in cost cuts of the $2 billion it targeted after the merger. The company said in December it will cut 10,400 jobs, or about 6 percent of its work force, a move that would produce pretax cost savings of about $680 million in 1999.
Citigroup, one of the 30 stocks in the Dow Jones industrial average, rose to 74 in pre-open trading Monday from Friday's close of 71-5/8, according to Reuters news agency.
BankAmerica, based in Charlotte, N.C., said it earned $1.91 billion, or $1.08 a diluted share, topping forecasts of $1.03 a share, according to First Call. A year earlier BankAmerica's net income of $1.33 billion, or 75 cents a share, included a $642 million charge. Excluding that charge, earnings were $1.97 billion, or $1.11 a share, in the 1998 quarter.
Bank of New York, the No. 17 bank, said net income rose to $316 million, or 41 cents a diluted share, from $284 million, or 36 cents a share, a year earlier. Analysts' forecasts were for 41 cents a share, according to First Call.
BankAmerica stock rose 1-1/16 to 73 Friday while Bank of New York fell 3/8 to 37-9/16.