Jane Fraser, CEO for Latin America at Citigroup Inc., speaks during the Milken Institute Global Conference in Beverly Hills, California, USA, on Monday, April 29, 2019.
Kyle Grillot | Bloomberg via Getty Images
Citigroup released fourth quarter results that surpassed profit analysts’ estimates when the company joined rival JPMorgan Chase in releasing reserves for loan losses.
Citigroup said on Friday that earnings fell 7%, to $ 4.63 billion, or $ 2.08 per share, compared with $ 1.34 per share estimate by analysts surveyed by Refinitiv. Company-wide revenue fell 10% to $ 16.5 billion, below the $ 16.7 billion estimate.
The bank released $ 1.5 billion in reserves for credit losses, a move greater than analysts had expected. This compares to an accumulation of reserves of $ 436 million in the third quarter and $ 253 million in the previous year. As a result, credit costs in the period were more than $ 2 billion less than in the previous year.
“As a sign of the strength and durability of our diversified franchise, our revenues remained stable in 2019, despite the huge economic impact of COVID-19,” said CEO Mike Corbat in the statement.
Citigroup made history by announcing that Jane Fraser was taking over as CEO, becoming the first large Wall Street bank to be run by a woman. Now, weeks before taking over Corbat, Fraser is expected to speak to investors and analysts for the first time on Friday. Shareholders are eager to know how Fraser, a former McKinsey partner who directed the bank’s operations in Latin America before becoming president in 2019, will improve the company’s returns.
Citigroup, the third largest US bank in assets, was hurt by relatively weak performance compared to rivals JPMorgan Chase, results that frustrated investors, including activist hedge fund ValueAct. The bank is also working under an order of regulatory consent to improve its internal risk controls after accidentally sending nearly $ 900 million to Revlon creditors last year.
Citigroup said it expects fourth quarter trading revenues to increase 15% from the previous year, while investment bank fees are expected to increase by 10% to 15%.
Shares in the New York-based bank fell 23% last year, compared to the 4.3% drop in the KBW Bank Index.
Here are the numbers:
- Earnings: $ 2.08 per share, against $ 1.34 per share by analysts surveyed by Refinitiv.
- Revenue: $ 16.5 billion, against an estimated $ 16.7 billion.