Citigroup disclosed a fourth-quarter loss of $1.8 billion, primarily attributed to significant charges related to overseas risks, the regional banking crisis last year, and CEO Jane Fraser’s ongoing corporate overhaul.
The charges, preannounced earlier this week, impacted quarterly earnings by $4.66 billion, equivalent to $2 per share, according to Citigroup. Excluding these charges, adjusted earnings would have been 84 cents per share, slightly exceeding the expected 81 cents, as per Wall Street analysts surveyed by LSEG (formerly Refinitiv).
Despite the disappointing performance due to these charges, CEO Jane Fraser emphasized the substantial progress Citigroup made in simplifying the bank throughout the year. Fraser, who unveiled a comprehensive corporate reorganization plan in September, expressed disappointment but acknowledged the ongoing efforts to streamline the bank.
As part of the restructuring, Citigroup anticipates reducing its headcount by 20,000 and incurring up to $1 billion in severance costs over the medium term. The bank had previously announced plans to exit municipal bond and distressed debt trading operations. The latest disclosure revealed larger charges than initially indicated by Chief Financial Officer Mark Mason earlier this week.
Citigroup reported a 3% decline in revenue to $17.44 billion for the quarter. However, the bank clarified that revenue rose by 2% when excluding the impact of divestitures and charges associated with exposure to Argentina. Despite the challenging circumstances, Citigroup highlighted the resilience of its institutional services operations, U.S. personal banking, and investment banking.
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Octavio Marenzi, CEO of consulting firm Opimas LLC, remarked that while Citigroup’s reported loss of $1.8 billion might appear significant, the underlying business demonstrated resilience. Fraser is expected to face increasing pressure to deliver positive results in the coming year, particularly in light of the ongoing corporate transformation.
Shares of Citigroup experienced a 2% rise during premarket trading, signaling a cautious optimism among investors despite the reported losses.