Citigroup has mixed Q4 earnings report

Citigroup has high profits per share, but lowered revenue.

Citibank building before Q4 earnings Source: Bloomberg

Citigroup has positive and negative news in its fourth-quarter(Q4) earnings report. The bank started earnings week for financial institutions by increasing its earnings per share, but missing revenue estimates.

How the US markets in December affected Citigroup

The unpredictability of Wall Street had an effect on Citigroup and its Q4 earnings. Overall revenue dropped by 21% to $17.1 billion because of the correction in the US markets in December. Many banks were hit hard by the volatility in 2018, and Citibank was no exception. The reported revenue is less than the $17.6 billion financial experts expected from the corporation.

Shares also disappointed in Citigroup’s Q4 report, declining by 18%. However, earnings per share(EPS) were up, with the bank producing $1.61 in EPS. The corporation bought back 74 million of its own shares to boost its earnings. Despite the mixed report, chief executive officer (CEO), Michael Corbat, noted the success of the bank’s corporate lending and international lending divisions.

‘A volatile fourth quarter impacted some of our market-sensitive business. However, our ICG accrual businesses – Treasury and Trade Solutions, Securities Services, Private Bank and Corporate Lending – continued their strong performance. And in Global Consumer Banking, we had good underlying growth in U.S. Branded Cards and solid performance from our franchise in Mexico where we have been investing,’ said Corbat.

What’s next for Citigroup?

Corbat sees Citigroup’s shares improving in the new year, after the unpredictability of 2018. Though the institution’ trading revenue plummeted last year after bond trading declined, the chief financial officer (CFO), John Gerspach, is optimistic about the company’s trading circumstances.

‘We have seen improvements in trading conditions. Volatility has somewhat moderated, and equity prices and yields have shown signs of stabilization,’ said Gerspach.

Citibank’s Q4 earnings report could be signal a disappointing one for other banks as they report their revenue this week. The 2018 stock market could have a great impact on the first banking earnings reports of the new year.

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