Citigroup Inc. (C) reported that its fourth quarter net income decreased 21% from the prior-year period, and decreased 43% excluding the divestiture-related impacts, primarily driven by higher cost of credit, largely resulting from the loan growth in PBWM and deterioration in macroeconomic assumptions, partially offset by the higher revenues and lower expenses.
Citigroup cost of credit was approximately $1.8 billion in the fourth quarter 2022, primarily driven by the continued normalization in card NCLs, particularly in Retail Services, and an ACL build of $0.7 billion, largely related to growth in cards and some deterioration in macroeconomic assumptions.
Revenues increased 6% from the prior-year period and up 5% excluding the divestiture related impacts, as growth in net interest income was partially offset by lower noninterest revenues. The lower non-interest revenues reflected declines in Investment Banking in Institutional Clients Group and lower investment product revenues in Global Wealth Management in PBWM.
Net income for the fourth quarter was $2.5 billion, or $1.16 per share, compared to net income of $3.2 billion, or $1.46 per share, prior year. Excluding divestiture-related impacts, fourth quarter earnings per share was $1.10 compared to $1.99, prior year.
On average, 18 analysts polled by Thomson Reuters expected the company to report profit per share of $1.14, for the quarter. Analysts' estimates typically exclude special items.
Revenues were $18.0 billion compared to $17.0 billion, last year. Analysts on average had estimated $17.9 billion in revenue.
Citigroup's end-of-period deposits were $1.4 trillion at quarter end, an increase of 4% from prior-year period.
For 2023, Citigroup targets revenues in a range of $78 billion - $79 billion, excluding 2023 divestiture-related impacts. For the first quarter, it expects revenues to be up mid-single digits, excluding 2022 & 2023 divestiture-related impacts.
For medium-term phase (3-5 Years), Citigroup is committed to 11-12% RoTCE target.
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