“Citigroup reported net income of $3.94bn in the first quarter, beating analysts’ estimates, but the bank suffered another setback as it disclosed a second alleged fraud linked to its Mexican business.

“While the size of the latest alleged fraud is smaller, it adds to concerns about Citi’s ability to govern its sprawling global operations in light of its recent failure to pass the Federal Reserve’s bank stress tests.

“Citi’s shares closed 4.4 per cent higher $47.67 after quarterly net income rose 3.4 per cent from $3.81bn to $3.94bn – higher than analysts’ estimates of $3.6bn – compared with the same quarter last year.

“The results benefited from a big drop in losses at Citi Holdings, the bad bank it split off during the financial crisis, which fell more than 60 per cent, down from $798m to $292m. Credit quality improved during the quarter, aided by the strengthening US economy.”

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Read full Financial Times article here.