Citigroup, Wachovia earnings rise

NEW YORK — Citigroup Inc. and Wachovia Corp., the first major U.S. banks to report quarterly results, posted higher-than-expected profits Monday, helped by keeping operating costs down.

Citigroup, the largest U.S. bank, reported an 11% drop in first-quarter profit, but earnings rose 4% excluding a charge related to 17,000 job cuts as revenue from securities trading soared.

Wachovia, the fourth-largest bank, said profit rose 33%, helped by the acquisition of Oakland-based mortgage lender Golden West Financial Corp.

The results provided solace to investors who expected many banks to report mediocre earnings. Lending margins are narrowing and credit losses are rising, especially among lenders exposed to riskier mortgages.

Net income at New York-based Citigroup fell to $5.01 billion, or $1.01 a share, from $5.64 billion, or $1.12, a year earlier. Excluding an $871-million restructuring charge, profit totaled $1.18 a share. That beat the average analyst forecast of $1.10, according to Reuters Estimates.

Revenue increased 15% to $25.46 billion, while operating expenses, excluding the charge, rose just 6%.

Net income at Charlotte, N.C.-based Wachovia rose to $2.3 billion, or $1.20 a share, from $1.73 billion, or $1.09, a year earlier. Excluding merger costs, profit was $2.31 billion, or $1.20 a share, topping the average forecast by 4 cents a share.

Revenue rose 17% to $8.24 billion, while operating expenses increased 8% to $4.59 billion.