Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

Citigroup reported Q1 net income of $7.9bn, up 216% and revenues of $19.3bn, down 6.8% vs. Q1 2020. Similar to peers, earnings were aided as it released $3.9bn in loan-loss reserves in the quarter. Unlike its peers, Markets and Securities Services revenues of $6.7bn increased by only 2% as fixed income revenues were at $4.6bn decreasing 5%. The banking major’s CEO said that they are exiting consumer banking in 13 markets outside US including China, India, Bahrain and Australia to focus on boosting profitability. Their CET1 ratio stood at 11.7% vs 11.1% in Mar-2020.

Citi’s bonds were stable – its 4% Perp up 0.2 to 102.5, yielding 3.4%.

Bank of America (BofA) reported Q1 net income of $8.1bn and revenues of $22.9bn, up 2x and 0.2% vs. Q1 2020 respectively. Similar to Citi, earnings were helped by a release of $2.7bn in reserves for loan losses after the bank provided for $11.3bn of expected credit losses during the peak of the pandemic. The bank’s FICC trading revenue increased 22% in the quarter and IB fee revenues rose 62%. Non-performing loans increased $210mn from the prior quarter to $5.2bn, driven by consumer real estate due to deferral activity. BofA also announced a $25bn stock buyback program. Their CET1 ratio stood at 11.8% vs 10.8% in Mar-2020.

BofA’s bonds were slightly higher – its 5.2% Perp up 0.4 to 105.2, yielding 2.7%

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