Citigroup Inc. (C, Financial) posted its fourth-quarter financial results before the market opened on Jan. 14. While the company recorded an earnings beat, its revenue fell short of expectations.
Numbers for the quarter
The New York-based bank reported net income of $4.3 billion. Adjusted earnings were $1.61 per share versus $1.55 expected. Quarterly revenue came in at $17.12 billion, missing estimates of $17.6 billion.
In addition to operating expenses declining 4% year over year to $9.89 billion, lower expenses, credit costs and corporate tax rates contributed to the company’s earnings growth. Citigroup saw lower credit losses this quarter (1.81% of total loans) as compared to the year-ago quarter (1.86%). The bank's efficiency ratio was 57.4%.
Citigroup's fixed-income revenue amounted to $1.94 billion, which reflected a 21% decline from the prior-year quarter due to underperformance of corporate bonds and other credit-sensitive securities. Furthermore, revenue from the consumer banking division was $8.44 billion. While equity market revenue surged 18% to $668 million, investment banking revenue declined 1% to $1.3 billion on a year-over-year basis.
In a statement, CEO Michael Corbat said the "volatile" quarter impacted some of the bank's businesses that are more sensitive to the market, especially fixed income.
 "However, our ICG accrual businesses – Treasury and Trade Solutions, Securities Services, Private Bank and Corporate Lending – continued their strong performance," he said. "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."
Market conditions
In regard to international markets, Chief Financial Officer John Gerspach said the global economy remained robust in spite of trade tensions, China’s economic growth, Brexit and some disturbances in Europe.
"When we take a look at even the macro environment, the fundamentals still look pretty good and I think that there is a big disconnect at this point in time between the market technicals and what we're really seeing on the ground," he said.Â
Gerspach added that while the company has witnessed loan growth in view of huge corporate spending, there still remain concerns regarding the impact of the ongoing U.S.-China trade war and moves by the Federal Reseve to unwind quantitative easing.
In regard to trading, however, he said conditions are improving and market volatility has moderated.
Disclosure: I do not hold any positions in the stocks mentioned.
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