Citi claims recovery is almost complete

Citigroup, the American financial giant that twice had to be bailed out by the US taxpayers, claimed to have edged closer to financial health yesterday, citing an increase in its capital reserves as evidence that its restructuring is nearing completion.

The bank also pointed to its growing lending business in the fast-growing markets of Latin America and Asia as evidence of its improving fortunes.

The publication of its quarterly results was Citigroup's first opportunity to allay concerns raised by the Federal Reserve, the US central bank, which last month gave the company a "fail" grade on its latest stress test and banned executives from returning cash to shareholders through share buybacks and a dividend increase.

Vikram Pandit, Citigroup chief executive, said that progress was being made. "While our businesses operated in an improved environment," he said, "we also saw the benefit of our investments."

Citigroup's first-quarter net income fell 2 per cent to $2.93bn (£1.85bn), or 95 cents a share, from $2.99bn, or 99 cents a share, a year earlier.