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Citigroup (C) Q4 Earnings Miss Estimates, Revenues Beat
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Citigroup Inc.’s (C - Free Report) fourth-quarter 2022 earnings per share (excluding divestiture-related impacts) of $1.10 have lagged the Zacks Consensus Estimate of $1.18. The figure declined 44.7% on a year-over-year basis. Our estimate for earnings was $1.09 per share.
After reporting better-than-expected earnings, shares of the company moved up marginally in the pre-market trading. The full-day trading session will display a clearer picture.
Citigroup witnessed growth in revenues in the quarter, backed by higher revenues in the Institutional Clients Group, as well as Personal Banking and Wealth Management segments. However, higher cost of creditwas a spoilsport.
Net income for the quarter was $2.51 billion, decreasing 21% from the prior-year quarter. Our estimate for the metric was $2.42 billion.
For 2022, the company reported a net income of $14.84 billion, down 32% year over year. Our estimate for the same was $14.75 billion. Income from continuing operations was $7.11 per share, down 30% year over year.
Revenues Rise, Expenses Decline
Revenues, net of interest expenses, moved up 6% year over year to $18 billion in the fourth quarter. The top line outpaced the Zacks Consensus Estimate of $17.91 billion.
Full-year revenues, net of interest expenses, aggregated to $75.33 billion, up 5% year over year.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $9.15 billion in the fourth quarter, up 3% year over year.Our estimate for the same was $9.73 billion.
ThePersonal Banking and Wealth Management segment’srevenues increased 5% year over year to $6.09 billion.Our estimate for the metric was $5.70 billion.
Legacy Franchises’ revenues of $2.05 billion moved down 6% year over year.Our estimate for the metric was $2.06 billion.
Corporate/Other’s revenues were $699 million, improving from the prior-year quarter’s $131 million.
Citigroup’s operating expenses declined 4% year over year to $12.98 billion.
Balance Sheet Position Improves
At the end of the fourth quarter, Citigroup’s deposits were up 5% from the prior quarter to $1.36 trillion. The company’s loans increased 2% to $657 billion.
Credit Quality Deteriorates
Total non-accrual loans declined 28% year over year to $2.4 billion.
However, Citigroup’s costs of credit for the December-end quarter were $1.8 billion against a negative $0.5 billion recorded in the year-earlier quarter. Also, Citigroup’s total allowance for credit losses on loans was $17 billion at the end of the reported quarter compared with $16.5 billion in the year-ago period.
Capital Position Strong
At the end of the fourth quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13%, up from 12.2% in fourth-quarter 2021. Also, the company’s supplementary leverage ratio in the reported quarter was at 5.8%, up year over year from 5.7%.
Capital Deployment
In the reported quarter, Citigroup returned $1 billion to shareholders in the form of common share dividends.
Our Viewpoint
In December, the company announced plans to wind down its consumer banking business in China. The country was part of the 14 markets in Asia, Europe, the Middle East and Africa, and Mexico that Citigroup had identified in April 2021 to exit the retail franchise. The company noted that the cost of shutting down the business would have no material impact on its financials, including the projected capital impact from the overall strategy.
Advancing its strategy to exit the consumer banking business in 14 international markets, Citigroup aims to simplify operations and expand institutional franchises in targeted regions. In this regard, it has closed five sales to date.
However, owing to transformation expenses and business-led investments, expenses might flare up in the upcoming period, impeding bottom-line growth.
Higher loan balance, rising rates and solid markets performance drive JPMorgan’s (JPM - Free Report) fourth-quarter 2022 adjusted earnings of $3.56 per share, which surpassed the Zacks Consensus Estimate of $3.11. JPM’s results excluded gains from the sale of Visa B shares and net investment securities losses in the Corporate segment.
However, a slowdown in the mortgage business and a slump in deal-making activities were other major headwinds for JPMorgan. JPM’s non-interest expenses (on managed basis) were $19 billion, up 6%.
Wells Fargo’s (WFC - Free Report) fourth-quarter 2022 earnings per share of 67 cents outpaced the Zacks Consensus Estimate of 63 cents. Results included several non-recurring items like $3.3 billion or 70 cents per share of operating losses related to “litigation, regulatory, and customer remediation matters.”
Wells Fargo’s results benefited from higher net interest income, rising rates and solid average loan growth. Yet, dismal non-interest income, higher provisions and weakness in the mortgage business were the major undermining factors. Also, the rise in non-interest expenses acted as a headwind for WFC.
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Citigroup (C) Q4 Earnings Miss Estimates, Revenues Beat
Citigroup Inc.’s (C - Free Report) fourth-quarter 2022 earnings per share (excluding divestiture-related impacts) of $1.10 have lagged the Zacks Consensus Estimate of $1.18. The figure declined 44.7% on a year-over-year basis. Our estimate for earnings was $1.09 per share.
After reporting better-than-expected earnings, shares of the company moved up marginally in the pre-market trading. The full-day trading session will display a clearer picture.
Citigroup witnessed growth in revenues in the quarter, backed by higher revenues in the Institutional Clients Group, as well as Personal Banking and Wealth Management segments. However, higher cost of creditwas a spoilsport.
Net income for the quarter was $2.51 billion, decreasing 21% from the prior-year quarter. Our estimate for the metric was $2.42 billion.
For 2022, the company reported a net income of $14.84 billion, down 32% year over year. Our estimate for the same was $14.75 billion. Income from continuing operations was $7.11 per share, down 30% year over year.
Revenues Rise, Expenses Decline
Revenues, net of interest expenses, moved up 6% year over year to $18 billion in the fourth quarter. The top line outpaced the Zacks Consensus Estimate of $17.91 billion.
Full-year revenues, net of interest expenses, aggregated to $75.33 billion, up 5% year over year.
In the Institutional Clients Group segment, total revenues, net of interest expenses, were $9.15 billion in the fourth quarter, up 3% year over year.Our estimate for the same was $9.73 billion.
ThePersonal Banking and Wealth Management segment’srevenues increased 5% year over year to $6.09 billion.Our estimate for the metric was $5.70 billion.
Legacy Franchises’ revenues of $2.05 billion moved down 6% year over year.Our estimate for the metric was $2.06 billion.
Corporate/Other’s revenues were $699 million, improving from the prior-year quarter’s $131 million.
Citigroup’s operating expenses declined 4% year over year to $12.98 billion.
Balance Sheet Position Improves
At the end of the fourth quarter, Citigroup’s deposits were up 5% from the prior quarter to $1.36 trillion. The company’s loans increased 2% to $657 billion.
Credit Quality Deteriorates
Total non-accrual loans declined 28% year over year to $2.4 billion.
However, Citigroup’s costs of credit for the December-end quarter were $1.8 billion against a negative $0.5 billion recorded in the year-earlier quarter. Also, Citigroup’s total allowance for credit losses on loans was $17 billion at the end of the reported quarter compared with $16.5 billion in the year-ago period.
Capital Position Strong
At the end of the fourth quarter, Citigroup’s Common Equity Tier 1 capital ratio was 13%, up from 12.2% in fourth-quarter 2021. Also, the company’s supplementary leverage ratio in the reported quarter was at 5.8%, up year over year from 5.7%.
Capital Deployment
In the reported quarter, Citigroup returned $1 billion to shareholders in the form of common share dividends.
Our Viewpoint
In December, the company announced plans to wind down its consumer banking business in China. The country was part of the 14 markets in Asia, Europe, the Middle East and Africa, and Mexico that Citigroup had identified in April 2021 to exit the retail franchise. The company noted that the cost of shutting down the business would have no material impact on its financials, including the projected capital impact from the overall strategy.
Advancing its strategy to exit the consumer banking business in 14 international markets, Citigroup aims to simplify operations and expand institutional franchises in targeted regions. In this regard, it has closed five sales to date.
However, owing to transformation expenses and business-led investments, expenses might flare up in the upcoming period, impeding bottom-line growth.
Citigroup Inc. Price, Consensus and EPS Surprise
Citigroup Inc. price-consensus-eps-surprise-chart | Citigroup Inc. Quote
At present, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Big Banks
Higher loan balance, rising rates and solid markets performance drive JPMorgan’s (JPM - Free Report) fourth-quarter 2022 adjusted earnings of $3.56 per share, which surpassed the Zacks Consensus Estimate of $3.11. JPM’s results excluded gains from the sale of Visa B shares and net investment securities losses in the Corporate segment.
However, a slowdown in the mortgage business and a slump in deal-making activities were other major headwinds for JPMorgan. JPM’s non-interest expenses (on managed basis) were $19 billion, up 6%.
Wells Fargo’s (WFC - Free Report) fourth-quarter 2022 earnings per share of 67 cents outpaced the Zacks Consensus Estimate of 63 cents. Results included several non-recurring items like $3.3 billion or 70 cents per share of operating losses related to “litigation, regulatory, and customer remediation matters.”
Wells Fargo’s results benefited from higher net interest income, rising rates and solid average loan growth. Yet, dismal non-interest income, higher provisions and weakness in the mortgage business were the major undermining factors. Also, the rise in non-interest expenses acted as a headwind for WFC.