Citigroup posts $1.8 billion fourth-quarter loss after litany of charges

• Citigroup posted a $1.8 billion fourth-quarter loss after booking several large charges tied to overseas risks, last year’s regional banking crisis and CEO Jane Fraser’s corporate overhaul.
• The charges hit quarterly earnings by $4.66 billion, or $2 per share, Citigroup said.
• Citigroup also said it expects to reduce its headcount by 20,000 and incur up to $1 billion more in severance costs over the medium term.

Citigroup on Friday posted a $1.8 billion fourth-quarter loss after booking several large charges tied to overseas risks, last year’s regional banking crisis and CEO Jane Fraser’s corporate overhaul.

All told, the charges — so massive the bank preannounced their effect this week — hit quarterly earnings by $4.66 billion, or $2 per share, Citigroup said. Excluding their effect, earnings would’ve been 84 cents a share, the bank said.

Here’s what the company reported versus what Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, expected:

• Earnings: 84 cents a share, adjusted, may not compare with 81 cents, expected.
• Revenue: $17.44 billion vs. $18.74 billion expected.

Fraser called her company’s performance “very disappointing” because of the charges but said Citigroup had made “substantial progress” simplifying the bank last year.

The CEO announced plans for a sweeping corporate reorganization in September after previous efforts failed to boost the bank’s results and share price. On Friday, Citi said it expects to cut its headcount by 20,000 and post up to $1 billion in severance costs over the medium term.

Citigroup previously said it would exit municipal bond and distressed debt trading operations as part of the streamlining exercise. Earlier this week, the company said it booked bigger charges in the quarter than previously disclosed by Chief Financial Officer Mark Mason.

Citigroup revenue slipped 3% to $17.44 billion in the quarter, though the bank said revenue rose 2% after excluding the effect of divestitures and charges tied to exposure to Argentina. Despite the noise, Citi’s institutional services operations, U.S. personal banking and investment banking performed well, according to the bank.

“Citigroup’s earnings looked awful with a big loss of $1.8 billion, but the bank’s underlying business showed resilience,” Octavio Marenzi, CEO of consulting firm Opimas LLC, said in an email. Fraser will be under mounting pressure to deliver results this year, he added.

Shares of Citigroup rose 2% during premarket trading.

JPMorgan Chase and Bank of America posted results earlier Friday, while Goldman Sachs and Morgan Stanley report Tuesday.

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