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NEW YORK CITY-Citigroup’s previously announced stock swap with the Treasury Department, in which the federal government will convert up to $25 billion of its TARP shares into common stock, is being put on hold until the results of the bank’s stress test come back. The swap is part of the plan Citigroup announced on Feb. 27 to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share, with Treasury matching up to $25 billion.

In a release, Citigroup cites the SEC review process of the Feb. 27 plan, which is “not yet complete,” and the imminent release of results of the stress tests the Federal Reserve Bank of New York is conducting on the nation’s 19 largest financial institutions. Bloomberg News, citing an anonymous source, says the test results will be released on May 4.

“This securities exchange has one goal–to increase our tangible common equity,” Citigroup CEO Vikram Pandit said in February when the stock-swap plan was announced. “While we believe Tier 1 capital remains the most important measure of the financial strength of banks, we recognize that the markets also view TCE as an important measure.”

The announcement of the delay on the stock swap came as Citigroup reported its best quarter since Q2 2007, making it one of three major financial firms to beat Wall Street expectations on Friday. Net income for Q1 was $1.6 billion with a loss per share of $0.18.

Revenues of $24.8 billion–up 99% over Q1 2008 levels–were driven by Citigroup’s institutional clients group. These were partially offset by net write-downs of approximately $3 billion from losses related to subprime and Alt-A mortgages and commercial real estate positions, according to an SEC filing. Citigroup last year was the 16th largest real estate investor in overseas markets and the 59th largest overall with acquisitions of $1.3 billion, according to Real Capital Analytics.

JP Morgan Chase’s Q1 earnings, announced Thursday, also beat analysts’ estimates. Its first-quarter net income was $2.1 billion, compared with net income of $2.4 billion in Q1 ’08. Earnings per share were 40 cents, compared with 67 cents per share in the same period a year earlier. Analysts polled by Bloomberg had reportedly forecast earnings of 32 cents per share for Q1 ’09. Revenues increased to $25 billion from 16.9 billion in Q1 ’08, attributable mainly to strong performance in investment banking operations.

“We remain focused on capital and balance sheet strength,” Jamie Dimon, chairman and CEO of Chase, says in a release. “These levels of capital and reserves, combined with our significant pre-provision earnings power, enable us to withstand an even worse economic scenario than we face today.”

A 48% drop in real estate-related revenues contributed to a decline in General Electric’s GE Capital unit revenues for Q1 ’09. However, the Fairfield, CT-based GE on Friday announced Q1 earnings of $2.8 billion, or 26 cents per share, down 40% year-over-year. Analysts polled by Thomson Reuters had forecast 21 cents per share, according to published reports.

GE’s Q1 revenues from continuing operations–including infrastructure and media as well as finance–were $38.4 billion, down 9% year-over-year. In a release, GE CEO Jeff Immelt says GE Capital “remains on track to be profitable for the full year.”

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