Citigroup’s profit fell 21% in the fourth quarter as the bank set aside more money for bad debts.

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Citigroup said that the fourth quarter income was reduced by more than 21% from last year because the bank is setting aside more money for bad debts.

Shares rose 1.7% as investors looked for some positives in the report including the fourth quarter’s record for fixed income trading.

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Fourth-quarter numbers compared to Wall Street expectations:

  • Net income: $2.5 billion and $3.2 billion last year.
  • Earnings: $1.10 per share, excluding certain expenses. (It wasn’t clear if that compares to the $1.14 a share estimate from analysts.)
  • Revenue: $18.01 billion in revenue, above the $17.9 billion expected from analysts surveyed by Refinitiv.
  • Interest Revenue: $13.27 billion, above the $12.7 billion expected by analysts, according to StreetAccount
  • Trading Revenue: Fixed income $3.16 billion, above expectations. Equivalent sales were $789 million, below expectations.
  • Estimates for bad debt: $1.85 billion compared to $1.79 billion expected by analysts surveyed by StreetAccount.

The efforts of Chief Executive Officer Jane Fraser at Citigroup have been affected amid concerns over the global economic crisis and central banks around the world struggling with the economy. Like other parts of the industry, Citigroup is also struggling with a sharp decline in investment banking income, a part that is being relieved by the expected growth of transactions in the quarter.

Citigroup’s net income fell 21% to $2.5 billion from $3.2 billion a year earlier, due to slower lending at its private bank and expectations for a weaker economic environment. the future economy. The weakness was offset by higher income and lower expenses.

The bank said it is setting aside more money for bad debts ahead, increasing provisions 35% from the previous quarter to $1.85 billion. This construction includes $640 million in unfunded liabilities due to increased private bank loans.

Revenues in the services and marketing segments increased by 32% and 18% respectively, due to growth in interest income and fixed income markets. The fixed income market segment saw revenue rise 31% to $3.2 billion, the highest fourth-quarter result since, due to strength in rates and currencies. .

“With their revenue up 32%, Services delivered another excellent quarter, and we have received significant contributions in Treasury and Trading Solutions and Securities Services,” said Fraser in a press release. “Markets had their fourth best quarter in recent memory, boosted by a 31% increase in Fixed Income, while Banking and Wealth Management were affected by similar market conditions. they’ve been through it all year.”

There was also strength in banking, with private banking revenues up 5% and US personal bank revenues up 10%. However, bank income fell by 3% due to lower mortgage lending.

JPMorgan, Bank of America and Wells Fargo also reported earnings on Friday. JPMorgan beat analysts’ estimates for the quarter and said that it now sees the lowest rate of the main level for 2023. Bank of America has also won the hopes of Wall Street because of the high interest rates that replace the losses in investment accounts.

Wells Fargo Shares rose despite the bank’s report that profits fell last quarter due to a recent decision and an increase in bank reserves amid a depressed economy.

(tagsTranslated) News: Market

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