Things are looking up for Citigroup

By Jesse Solomon

NEW YORK (CNNMoney) -- It was a tough quarter for Citigroup, but the bank is starting to sing its own version of "The Sun Will Come Out Tomorrow".

The bank beat analyst estimates Monday and reported a first quarter profit of $3.9 billion, or $1.30 per share on an adjusted basis, up a solid 4% from the same period last year.

Revenue for the first three months of the year was $20.1 billion, slightly lower than the first quarter of 2013, but better than analysts were predicting.

Shares of Citigroup jumped almost 4% in premarket trading.

First quarter results included a loss from the bank's problems in Mexico, where its subsidiary there is under investigation for fraudulent loans of roughly $400 million to Oceanografia S.A., a Mexican oil services company.

Like other banks, Citigroup suffered from a decline in bond trading and lower mortgage activity in the quarter. But deposits and loans grew, the firm said.

The fact that Citigroup came out as strong as it did was a surprise. It was a particularly rough start to the year for the bank.

In March, the Federal Reserve rejected the bank's capital plan to increase its dividends and share repurchases, saying it was worried about the bank's ability to weather a severe economy downtown. It was the only major Wall Street firm to fail the Fed's so-called stress tests, and its shares have tumbled over 12% since the beginning of the year.

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