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Citigroup Inc.’s (C - Free Report) fourth-quarter 2023 earnings per share (excluding the impact of notable items) of 84 cents surpassed the Zacks Consensus Estimate of 73 cents. Including the impact of notable items in the quarter, C recorded loss per share of $1.16. It registered earnings of $1.16 a year ago. Our estimate was pegged at $1.15.
It witnessed growth in total loans and deposits in the quarter. However, a decline in revenues and deteriorating credit quality are near-term woes.
Net loss for the quarter was $1.8 billion. It recorded net income of $2.5 billion in the prior-year quarter.
For 2023, the company reported net income of $9.23 billion, plunging 37.8% year over year. Our estimate was pegged at $13.67 billion.
Revenues Decline, Expenses Increase
Revenues, net of interest expenses, moved down 3.1% year over year to $17.44 billion in the fourth quarter. The top line missed the Zacks Consensus Estimate of $18.66 billion.
Nonetheless, full-year revenues, net of interest expenses, aggregated to $78.46 billion, up 4.1% year over year.
Management has made changes to its financial reporting structure from fourth-quarter 2023. The new organizational structure replaced the existing reportable segments with five new reportable operating segments, namely Services, Markets, Banking, Wealth and U.S. Personal Banking. Further, the remaining activities will be clubbed under a separate All Other segment consisting of Legacy Franchises and Corporate/Other units.
In the Services segment, total revenues, net of interest expenses, were $4.5 billion in the reported quarter, up 5.5% year over year.
The Markets segment’s revenues decreased 18.6% year over year to $3.41 billion.
Banking’ revenues of $949 million moved up 22% year over year.
U.S. Personal Banking’s revenues were $4.94 billion, increasing 12.1% from the prior-year quarter.
In the Wealth’s segment, revenues were $1.67 billion in the reported quarter, down 3% year over year.
Revenues in the All Other segment decreased 16.7% year over year to $2.03 billion.
Citigroup’s operating expenses increased 23.2% year over year to $16 billion. We suggested the metric to be $15.32 billion.
Balance Sheet Position Strong
At the end of the fourth quarter, Citigroup’s deposits were up 2.8% from the prior quarter to $1.31 trillion. The company’s loans increased 3.5% to $671.2 billion.
Credit Quality Deteriorates
Total non-accrual loans jumped 31.1% year over year to $3.2 billion. Allowance for credit losses on loans was $18.15 billion compared with $16.97 billion in the prior-year quarter.
Also, C’s provisions for credit losses and for benefits and claims for the fourth quarter were $3.55 billion compared with $1.85 billion in the year-earlier quarter.
Capital Position Strong
At the end of the fourth quarter, the bank’s Common Equity Tier 1 capital ratio was 13.3%, up from 13.03% in fourth-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was 5.8% compared with 5.82% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned around $1.5 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
Citigroup’s results reflected losses during the quarter due to certain notable items recorded. Nonetheless, the business transformation initiatives including its consumer business exits and organizational simplification efforts will help it in the long run. Focus on growth in profitable business while eliminating non-viable segments will likely aid results in the long run.
Due to transformation expenses and business-led investments, expenses have flared up in the quarter, impeding bottom-line growth.
Bank OZK (OZK - Free Report) is slated to report fourth-quarter and full-year 2023 results on Jan 18. It carries a Zacks Rank #3 (Hold) at present.
Over the past week, the Zacks Consensus Estimate for OZK’s quarterly earnings per share has moved marginally south to $1.45.
First Horizon Corp. (FHN - Free Report) is scheduled to release fourth-quarter and full-year 2023 earnings on Jan 18. The company carries a Zacks Rank #3 at present.
The consensus estimate for FHN’s quarterly earnings has been unchanged at 31 cents over the past 60 days.
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Citigroup's (C) Q4 Earnings Beat Estimates, Revenues Decline
Citigroup Inc.’s (C - Free Report) fourth-quarter 2023 earnings per share (excluding the impact of notable items) of 84 cents surpassed the Zacks Consensus Estimate of 73 cents. Including the impact of notable items in the quarter, C recorded loss per share of $1.16. It registered earnings of $1.16 a year ago. Our estimate was pegged at $1.15.
It witnessed growth in total loans and deposits in the quarter. However, a decline in revenues and deteriorating credit quality are near-term woes.
Net loss for the quarter was $1.8 billion. It recorded net income of $2.5 billion in the prior-year quarter.
For 2023, the company reported net income of $9.23 billion, plunging 37.8% year over year. Our estimate was pegged at $13.67 billion.
Revenues Decline, Expenses Increase
Revenues, net of interest expenses, moved down 3.1% year over year to $17.44 billion in the fourth quarter. The top line missed the Zacks Consensus Estimate of $18.66 billion.
Nonetheless, full-year revenues, net of interest expenses, aggregated to $78.46 billion, up 4.1% year over year.
Management has made changes to its financial reporting structure from fourth-quarter 2023. The new organizational structure replaced the existing reportable segments with five new reportable operating segments, namely Services, Markets, Banking, Wealth and U.S. Personal Banking. Further, the remaining activities will be clubbed under a separate All Other segment consisting of Legacy Franchises and Corporate/Other units.
In the Services segment, total revenues, net of interest expenses, were $4.5 billion in the reported quarter, up 5.5% year over year.
The Markets segment’s revenues decreased 18.6% year over year to $3.41 billion.
Banking’ revenues of $949 million moved up 22% year over year.
U.S. Personal Banking’s revenues were $4.94 billion, increasing 12.1% from the prior-year quarter.
In the Wealth’s segment, revenues were $1.67 billion in the reported quarter, down 3% year over year.
Revenues in the All Other segment decreased 16.7% year over year to $2.03 billion.
Citigroup’s operating expenses increased 23.2% year over year to $16 billion. We suggested the metric to be $15.32 billion.
Balance Sheet Position Strong
At the end of the fourth quarter, Citigroup’s deposits were up 2.8% from the prior quarter to $1.31 trillion. The company’s loans increased 3.5% to $671.2 billion.
Credit Quality Deteriorates
Total non-accrual loans jumped 31.1% year over year to $3.2 billion. Allowance for credit losses on loans was $18.15 billion compared with $16.97 billion in the prior-year quarter.
Also, C’s provisions for credit losses and for benefits and claims for the fourth quarter were $3.55 billion compared with $1.85 billion in the year-earlier quarter.
Capital Position Strong
At the end of the fourth quarter, the bank’s Common Equity Tier 1 capital ratio was 13.3%, up from 13.03% in fourth-quarter 2022. Also, the company’s supplementary leverage ratio in the reported quarter was 5.8% compared with 5.82% in the prior year.
Capital Deployment Solid
In the reported quarter, Citigroup returned around $1.5 billion to shareholders through common share dividends and share repurchases.
Our Viewpoint
Citigroup’s results reflected losses during the quarter due to certain notable items recorded. Nonetheless, the business transformation initiatives including its consumer business exits and organizational simplification efforts will help it in the long run. Focus on growth in profitable business while eliminating non-viable segments will likely aid results in the long run.
Due to transformation expenses and business-led investments, expenses have flared up in the quarter, 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Other Banks
Bank OZK (OZK - Free Report) is slated to report fourth-quarter and full-year 2023 results on Jan 18. It carries a Zacks Rank #3 (Hold) at present.
Over the past week, the Zacks Consensus Estimate for OZK’s quarterly earnings per share has moved marginally south to $1.45.
First Horizon Corp. (FHN - Free Report) is scheduled to release fourth-quarter and full-year 2023 earnings on Jan 18. The company carries a Zacks Rank #3 at present.
The consensus estimate for FHN’s quarterly earnings has been unchanged at 31 cents over the past 60 days.