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Citigroup

Citigroup misses already dampened 4Q earnings forecasts

Kaja Whitehouse
USA TODAY
A person walks past a Citibank location in Philadelphia. Citigroup reported fourth quarter earnings Thursday that fell short of Wall Street expectations.

Citigroup (C) missed already dampened earnings expectations for the three months ended in December — making it the third bank to disappoint in just two days.

The global bank posted earnings of 6 cents a share on revenue of $17.8 billion. Wall Street analysts were expecting profits of 9 cents a share on revenue of $18.5 billion, according to data from Thompson Reuters.

Last year, Citigroup posted earnings of 77 cents per share and $17.78 billion in revenue.

Citigroup CEO Michael Corbat

Citigroup warned in December that it would account for charges of $3.5 billion in the fourth quarter, including $2.7 billion in legal costs and $800 million in repositioning costs. The bank was also hit by weakened trading revenues, due to broader market volatility — a factor that has hit banks across the board.

Citigroup shares dropped 2.1% in early trading Thursday to $47.99 a share.

On Wednesday, JPMorgan kicked off the earnings season with disappointing results, weakened by legal costs and dampened trading revenue.

Bank of America continued the trend early Thursday with earnings of 25 cents a share, down 11% from the year earlier. The Charlotte, N.C., bank said its trading revenue dropped 20% in the fourth quarter to $2.37 billion from the previous year.

Citigroup was also hurt by dampened trading revenue, thanks to volatile markets in the fourth quarter. The bank said trading revenue dropped to $2.46 billion in the fourth quarter, down 14% from the previous year. Fixed income trading revenue tumbled the most, down 16%, compared with a 2.7% drop in equities trading revenue.

Only Wells Fargo beat the trend, reporting on Wednesday that profits rose 2% for the three months ended in December. The San Francisco bank focuses more on lending and deposits than trading for revenue.

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