It came as Citi said it had set aside more cash to cover losses on energy loans, and as the cost of shrinking some of its businesses increased.
Citi, which is restructuring to focus on more profitable businesses, saw net income fall to $3.5bn (Â£2.5bn) from $4.8bn the time a year earlier.
However, the results were better than analysts had been expecting.
Chief executive Michael Corbat said Citi was making progress "in becoming a simpler, smaller, safer and stronger institution".
The bank's profit decline, in the three months to the end of March, is the largest among big US banks that have reported first quarter results so far.
Citi recently slipped from third to fourth biggest US bank by assets, after being overtaken by Wells Fargo.
The bank's revenue from fixed income markets dropped by 11.5% to $3.09bn, while investment banking revenue plunged by 27.2% to $875m.
"While our market-sensitive products clearly suffered from weak investor sentiment during the quarter, we continued to make progress in several key areas," said Mr Corbat.
Earnings per share were $1.10. Analysts had expected Citi's per share earnings to be closer to $1.03.
The global banking industry has struggled since the start of year due to uncertainty surrounding the world's economic outlook, with a slowdown in China and the continued fall of oil prices.
Citi was not alone in reporting lower year-over-year profit for the first quarter. Earlier in the week JP Morgan reported a 6.7% drop in profit. On Thursday, Bank of America reported that profits fell 13% in the first quarter and Wells Fargo reported a 7% drop.
Like Citi, all three set aside cash to cover bad loans to the energy sector.
Citigroup has had a larger drop in profit is in part because it has greater exposure to emerging markets, where the economies have been slowing.
The bank has been selling assets and leaving less profitable markets. Mr Corbat said the first quarter earnings included "a significant repositioning charge" of $491m.
On Wednesday, Citi was one of the few large US banks to receive regulatory approval for its "living will" - that is the bank's plan to shut down operations in the event of another financial crisis.
US bank Citigroup has reported a 27% fall in first quarter profits compared with a year earlier.