By late morning, it is apparent that Citigroup Inc. (NYSE:C) has been embraced with open arms by investors, after an overwhelmingly positive first-quarter earnings report that showed the bank blowing past the bar set by analysts on both earnings and revenue. Considering the fact that the bank changed CEOs during the last quarter of 2012 — somewhat unexpectedly — makes the victory sweeter still.
The celebrating began almost immediately after the results were announced, and Citi shares ended the day yesterday not very far from the $45 mark. Exuberant investors picked today up where they left off, propelling the stock to around $46.40, last time I checked. So far, this is the best Citi has done in a month’s time.
The party atmosphere seems to be buoying other big banks, as well. Bank of America Corp (NYSE:BAC), which dropped during the day yesterday after getting a lift around mid-morning, has gained nearly 1.5% so far today, after closing at a smidge under $12 yesterday. Wells Fargo & Co (NYSE:WFC) has also moved up more than 1% after getting kicked around a little since its own earnings report last Friday.
Only JPMorgan Chase & Co. (NYSE:JPM) is a bit down in the dumps, perhaps on the news that its money-laundering controls need to be cleaned up.
What’s next for Citi?
With new leadership and a commitment to wind down its albatross, Citi Holdings, things are looking much brighter for the big bank. The earnings release noted that the troublesome section has been reduced by 29% over the past year, and now represents only 8% of Citi’s total assets. Despite the trimming — or, perhaps, because of it — the unit also pumped up its revenues by 15% year over year.
One troublesome area concerns legal costs, which are huge for Citi Holdings, compared with the rest of the company. But investors obviously have faith that Citi will continue to fix what is broken — and the party continues.