Citigroup originated $18 billion in single-family loans in the first quarter, the highest in five quarters. But the giant bank has no ambitions of being a big player in the origination market.
Citigroup chief financial officer John Gerspach told investors and analysts during a conference call that the bank is focused mainly on providing mortgage loans for its retail bank customers.
“We are not looking to significantly grow share in mortgages, other than our existing retail banking base,” the CFO said Monday.
First-quarter mortgage originations are up 26% from a year ago. But they are down from $21 billion in the fourth quarter of 2011.
“Mortgage banking volumes remained strong, although margins declined versus the prior year period,” Citi said in its first-quarter earnings press release.
Citigroup’s third-party servicing portfolio fell to $175.8 billion in the first quarter, down 11% from a year ago.
Meanwhile, Citigroup continued to make progress in liquidating assets from its bad bank known as Citi Holdings. Citi Holdings had $149 billion in assets, including $86 billion in residential first and second mortgages at the end of the first quarter.
“Since the first quarter of 2011, we have reduced the North American mortgage loans in Citi Holdings by 28%—driven by $18 billion in pay-downs, $8 billion in asset sales and $8 billion in net losses,” Gerspach said.
Citi
“While we are of course encouraged by the sale of these reperforming mortgages, it is still unclear whether buyers will have an appetite for additional sales. We will continue to test the markets,” the CFO said.
