Citigroup's fourth quarter earnings disappoint
Citigroup reported earnings of $0.38 a share for the fourth quarter, which was well below expectations.
The culprit largely was the $1.3 billion of legal costs and related expenses that the bank had to swallow. Excluding the DVA and what the bank calls "repositioning" charges, the bank earned $0.69 per share, up 68 percent from a year ago.
At a time when people are skeptical about the organic growth prospects of banks, there were some other silver linings. Citigroup posted revenues of $18.7 billion in the quarter (excluding the DVA), up 8 percent year over year, reflecting a 9 percent surge in the good bank, which was offset by a 2 percent decline in the bad bank.
Global banking operations were able to hike revenues 4 percent, though net income sank 2 percent. North America bank revenues grew 3 percent to $5.3 billion thanks to higher retail banking revenues that were partially offset by lower card revenues.
Another bright spot was investment banking and trading. Investment banking revenues rose a solid 56 percent, and FICC-oriented revenues rose 58 percent year over year. Sequentially, however, FICC-oriented revenues fell 27 percent. In a minor disappointment, the bank released a net $86 million of loan loss reserves in the fourth quarter, compared to $1.5 billion a year ago.
This represents the first earnings release of the Michael Corbat era.
- here's the release
All eyes on fourth quarter bank earnings