On Wednesday morning, Citigroup unveiled its fourth-quarter earnings, presenting a robust financial performance that surpassed Wall Street analysts’ expectations in both revenue and earnings per share. The results heralded a promising outlook for the banking giant as shares recorded an uptick of over 2% in premarket trading. The earnings report showcased an earnings per share of $1.34 compared to the anticipated $1.22, while revenue also exceeded estimates, coming in at $19.58 billion against an expected $19.49 billion.
Citigroup reported net income of $2.86 billion for the quarter, demonstrating a significant turnaround from a net loss of $1.84 billion in the previous year’s fourth quarter. However, it’s worth noting that year-over-year comparisons may be influenced by various charges the bank recorded during the last period of 2023. Despite these complexities, positive year-over-year growth was evident across multiple business lines. Notably, investment banking emerged as a key contributor, with revenue soaring by 35% from the prior year.
In a broader context, total banking revenue witnessed a 12% increase, which notably escalated to 27% when factoring in the effects of loan hedges. The market revenue saw an impressive 36% year-over-year growth, driven by strong performances in both fixed income and equity sectors. Analysts had projected fixed income markets revenue at $2.95 billion, but Citi surpassed expectations with a remarkable $3.48 billion.
In a further breakdown of their revenue streams, Citi’s wealth management and services divisions also displayed robust growth, reporting year-over-year revenue increases of 20% and 15%, respectively. This diversification indicates a well-rounded approach in navigating market volatility and highlights the strategic focus on enhancing financial performance across different segments of the bank.
CEO Jane Fraser reflected on the achievements during the earnings call, emphasizing that 2024 marked a pivotal year for Citigroup. Under her leadership since March 2021, Fraser has spearheaded efforts to streamline operations, including the strategic divestiture of certain international businesses. The impact of these initiatives has been tangible; Fraser reported an approximate 40% rise in net income, totaling $12.7 billion, while the company exceeded its annual revenue targets, which were bolstered by record performances in services, wealth management, and U.S. personal banking sectors.
As investors await updates on Fraser’s comprehensive turnaround plans, which have been a focal point since her assumption of the role, the overall sentiment towards Citigroup’s stock has been favorable. In 2024, the stock has witnessed a nearly 37% increase, setting a solid precedent for what is to come. With its stock value climbing over 4% at the start of the current year, Citigroup’s strategic maneuvers and the promising earnings report position the bank favorably in the competitive financial landscape.
Citigroup’s recent earnings not only reflect a commendable recovery from previous setbacks but also illustrate a strategic vision aimed at reinforcing its market standing and fostering sustained growth.