Citigroup reports steep drop in 4th-quarter earnings as operating expenses pile up
Citigroupreported $3.2 billion in net income for its fourth quarter, down 26% from a year ago.
- The bank earned $1.46 a share, lower than an estimated $1.62 a share.
- Operating expenses increased 18% year on year.
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Citigroup on Friday reported a 26% year-over-year drop in fourth-quarter net income to $3.2 billion as higher revenues were more than offset by rising expenses from the divestiture of its banking businesses in Asia.
The third-largest bank in the US said operating expenses increased 18% year on year to $13.5 billion. Excluding the impact of Asia divestitures, expenses increased 8%.
Shares of Citigroup slipped by 2.5% as of 9:50 a.m. ET in New York, after losing 4% in premarket trading.
Here are the key numbers:
Revenue: $17 billion, versus Bloomberg's estimate of $16.8 billion.
Earnings per share: $1.46 per share, versus Bloomberg's estimate of $1.62.
Investment banking revenue increased by 43% to $1.8 billion, beating Bloomberg's $1.63 billion estimate. But trading revenue slipped.
For all of 2021, Citigroup reported $22 billion in net income, double the $11 billion earned in 2020. But revenue slipped to $71.9 billion from $75.5 billion in prior year.
"We had a decent end to 2021 driving net income for the year up to $22 billion in what was a far better credit environment than the previous year," said
She added that Citi returned nearly $12 billion of capital to shareholders, and tangible book value, the measure of a bank's worth if liquidated, increased 7% during the year.
Citigroup recently revealed plans to sell its consumer-banking franchises in less profitable
The bank also said it plans to divest its consumer, small business, and middle-market banking businesses in Mexico.
Citigroup's report helped kick off the fourth-quarter earnings season for corporations, which will help shed light on how well businesses are faring amid the surging cases of COVID-19.
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