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Citigroup shares jumped Wednesday after fourth-quarter earnings beat estimates on the top and bottom lines, reflecting broad-based strength across the bank.
“2024 has been a critical year and our results show that our strategy is executing as intended and delivering stronger performance for our business. Our net income increased nearly 40% to $12.7 billion, and we exceeded our full-year revenue targets, including record years in Services, Wealth and Personal Banking in the US,” CEO Jane Fraser said in a press release. .
The company’s shares rose by almost 7%.
Here’s how the company fared compared to LSEG analyst consensus estimates:
- income: $1.34 per share vs. $1.22 expected
- income: $19.58 billion versus the expected $19.49 billion
Citi posted net income of $2.86 billion, up from a net loss of $1.84 billion a year ago, when its results suffered a series of charged by Citi in the last period of 2023. Revenue increased by 12% compared to the same period last year.
The bank did say it expects its return on tangible common equity to be between 10% and 11% in 2026 as it continues to make investments and reform its business. This range is lower than the bank’s previously stated medium-term target of 11% to 12%.
Fraser called the level “a waypoint, not a destination” and said it should rise as the company continues to make internal investments.
“As CEO, I want this company to be set up for long-term success and that we have enough capacity to invest,” Fraser said on a conference call with analysts.
“This level is a waypoint, not a destination. We intend to improve profitability well above this level and deliver Citi’s full potential for our shareholders,” Fraser said.
Citi also announced a $20 billion share buyback. CFO Mark Mason said about $1.5 billion of that should happen in the first quarter.
The bank reported growth in several different business units during the fourth quarter. In particular, investment banking was a bright spot, with revenue up 35% year over year to $925 million. Citi said the continued momentum in the issuance of investment-grade corporate debt has helped grow that line of business. As a result, total banking income grew by 12%, which increased to 27% after adjusting for the impact of loan hedging.
Markets revenue jumped 36% year-over-year to $4.58 billion, with both fixed income and equity businesses growing. Fixed income markets reported revenue of $3.48 billion, well above analysts’ estimates of $2.95 billion, according to StreetAccount.
Revenue from the capital and services divisions grew by 20% and 15%, respectively, over the year.
Citi’s loan value for the quarter was $2.59 billion. That’s down from $3.55 billion a year ago and $2.68 billion in the third quarter. The bank added a net $203 million to the loan loss provision, also down from prior periods.
Questions from Wall Street analysts on a conference call Wednesday focused largely on Citi’s expenses and the progress of its rehabilitation. The company is forecasting a modest cost reduction in 2025, which Mason said will include about $600 million in costs related to the company’s repositioning.
“We all want the transformation to be done quickly, and we want it done right. That’s why the costs are temporarily raised — to make the investment to get there,” Fraser said.
The CEO also said the planned initial public offering of Banamex, Bank of America’s retail business in Mexico, could not happen until 2026 at the earliest.
Citi stock has been good in 2024, up nearly 37% for the year. The stock is up more than 4% this year as of Wednesday.
