Citi Misses On Earnings


Citi just reported fourth quarter earnings, and it was a miss.

The bank reported earnings per share of 6 cents. Analysts had expected 9 cents, according to data compiled by Bloomberg.

For Q4, revenue came in at $US17.81 billion. Analysts had expected revenue to come in at $US18.61 billion.

Shares of Citi were last trading down more than 2.4% in the pre-market.

More to come…

Here’s the release:

Citigroup Inc. today reported net income for the fourth quarter 2014 of $US350 million, or $US0.06 per diluted share, on revenues of $US17.8 billion. This compared to net income of $US2.5 billion, or $US0.77 per diluted share, on revenues of $US17.8 billion for the fourth quarter 2013. Legal and related expenses and repositioning charges totaled $US3.5 billion in the current quarter, compared to $US1.0 billion in the prior year period.

CVA/DVA4 was $US7 million ($US4 million after-tax) in the fourth quarter 2014, compared to negative $US164 million (negative $US100 million after-tax) in the prior year period. Fourth quarter 2013 results also included a $US189 million after-tax benefit related to the divestiture of Citi’s Credicard business in Brazil and a $US235 million after-tax charge related to the net fraud loss in Mexico.5Excluding CVA/DVA and the items in the fourth quarter 2013, earnings were $US0.06 per diluted share, compared to prior year earnings of $US0.82 per diluted share.

Michael Corbat, Chief Executive Officer of Citigroup, said, “While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased our market share among our target institutional clients, grew our core loan book, and improved both our net interest revenue and margin from 2013 levels. For the first time since its establishment, Citi Holdings was profitable for the full year and we accelerated the utilization of our deferred tax assets. We strengthened our capital planning process and made Citi a safer and stronger institution, as evidenced by the increases to our capital, leverage and liquidity ratios. Although we made some difficult decisions over the course of the year, I believe they allowed us to put our franchise in a position to have a successful 2015.”

Citigroup full year 2014 net income was $US7.3 billion on revenues of $US76.9 billion, compared to net income of $US13.7 billion on revenues of $US76.4 billion for the full year 2013. Full year 2014 results included CVA/DVA of negative $US390 million (negative $US240 million after-tax), compared to negative $US342 million (negative $US213 million after-tax) in the prior year period. Citigroup full year 2014 results also included a charge of $US3.8 billion ($US3.7 billion after-tax) to settle RMBS and CDO-related claims.6 Full year 2013 results also included the benefit related to the impact of the Credicard divestiture and the net fraud loss. In addition, Citigroup recorded a tax charge of $US210 million in the first quarter of 2014 related to corporate tax reforms enacted in two states, and a tax benefit of $US176 million in the third quarter 2013 related to the resolution of certain tax audit items. Excluding CVA/DVA, Citigroup revenues were $US77.3 billion in 2014, up 1% compared to the prior year. Excluding CVA/DVA as well as the impact of the mortgage settlement in 2014, Credicard divestiture and net fraud loss in 2013, and the tax items in both years,7 net income was $US11.5 billion in 2014, down 16% compared to 2013, as higher revenues and lower net credit losses were offset by higher operating expenses, a lower net loan loss reserve release and a higher effective tax rate.