Bank stocks are climbing after the first batch of earnings beats (JPM, C, MS, GS, BAC)
Revenue of $25.3 billion was in line with the consensus estimate.
Chief Executive Michael Corbat has pledged to grow profits from consumer lending to stock trading, and return tens of billions of dollars to shareholders after finally putting the United States' fourth-largest bank on a stable path following the 2007-09 financial crisis. The sharp decline was offset by a 16 percent increase in equity trading revenue.
Citi's consumer banking division reported a 6 percent drop in profits in the quarter, to $1.17 billion, as the bank saw higher credit costs.
Citigroup's investment bank was the driver of the bank's profit growth in the quarter, despite a notable drop in bond trading revenue.
Within ICG, Banking revenues jumped 16% to $4.6bn, helped in part by hedges on loans and a 14% rise in investment banking income to $1.2bn - with equity underwriting making a "particularly" solid contribution.
Last month, Gersprach warned that overall trading revenue would fall by 15 percent, worse than the 11 percent drop that materialized.
FILE PHOTO: A view of the exterior of the Citibank Corporate headquarters in the Manhattan borough of New York City, May 20, 2015.
Bank of America Corp and Wells Fargo & Co, the second- and third-biggest US banks by assets, are due to report results on Friday.
Commenting on the lender's latest set of results, chief Michael Corbat said: "We had revenues in numerous products we have been investing in, tightly managed our expenses, and again saw loan growth in both our consumer and institutional businesses". In North America, retail banking revenue rose 12%, excluding mortgages.
Shares of Citigroup have risen 26% this year, easily outperforming the broader market.
"Investors are taking exception to both companies adding to their credit card loan reserves", said Jason Goldberg, analyst at Barclays. JPMorgan also had to set aside more money in the quarter to cover souring credit card loans.
The store cards business has been grappling with less successful collection efforts after accounts become delinquent.
Citi reported a 3 percent year-over-year increase in global consumer banking revenue. Citi cited "continued growth in loans and assets under management", as well as higher interest rates.
Citi-branded cards in the USA provide about 10 percent of Citigroup revenue and profits and are seen by Corbat as one of the company's best shots at growing profits.
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