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Citigroup beats analysts’ profit estimates as bank releases money set aside for loan losses
PUBLISHED FRI, JAN 15 20216:27 AM ESTUPDATED FRI, JAN 15 20218:16 AM EST
Hugh Son
@HUGH_SON
Here are the numbers: Earnings: $2.08 a share, vs the $1.34 a share of analysts surveyed by Refinitiv.
Revenue: $16.5 billion, vs the $16.7 billion estimate.
The bank released $1.5 billion in reserves for credit losses, a move that was bigger than analysts had expected. That compared with a reserve build of $436 million in the third quarter and $253 million a year earlier.
Jane Fraser, chief executive officer for Latin American at Citigroup Inc., speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
Jane Fraser, chief executive officer for Latin American at Citigroup Inc., speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
Kyle Grillot | Bloomberg via Getty Images
Citigroup posted fourth-quarter results that beat analysts’ estimates for profit as the firm joined rival JPMorgan Chase in releasing reserves for loan losses.
Citigroup said Friday that earnings fell 7% to $4.63 billion, or $2.08 a share, compared with the $1.34 a share estimate of analysts surveyed by Refinitiv. Companywide revenue fell 10% to $16.5 billion, below the estimate of $16.7 billion.
The bank released $1.5 billion in reserves for credit losses, a move that was bigger than analysts had expected. That compared with a reserve build of $436 million in the third quarter and $253 million a year earlier. As a result, credit costs in the period were more than $2 billion less than a year earlier.
“As a sign of the strength and durability of our diversified franchise, our revenues were flat to 2019, despite the massive economic impact of COVID-19,” CEO Mike Corbat said in the release.
Citigroup made history when it announced Jane Fraser was taking over as CEO, making it the first big Wall Street bank to be run by a woman. Now, weeks before she’s set to take over for Corbat, Fraser is expected to address investors and analysts for the first time on Friday. Shareholders are keen to hear how Fraser, a former McKinsey partner who ran the bank’s Latin American operations before becoming president in 2019, will improve returns at the company.
Citigroup, the third-biggest U.S. bank by assets, has been hobbled by relatively poor performance compared to rivals including JPMorgan Chase, results that have frustrated investors including activist hedge fund ValueAct. The bank is also toiling under a regulatory consent order to improve its internal risk controls after it accidentally sent almost $900 million to lenders of Revlon last year.
Citigroup has said it expected fourth quarter trading revenues to climb 15% from a year earlier, while investment banking fees should climb by 10% to 15%.
Shares of the New York based bank fell 23% last year, compared to the 4.3% decline of the KBW Bank Index.
Here are the numbers:
Earnings: $2.08 a share, vs the $1.34 a share of analysts surveyed by Refinitiv.
Revenue: $16.5 billion, vs the $16.7 billion estimate.