Citigroup beats by $0.09 (including 3 cent tax benefit), misses on revs; Fixed Income falls 21% y/y, Equities +18% y/y; Expenses decline 4% y/y; Loan Growth +3% y/y (56.69)
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Reports Q4 (Dec) earnings of $1.64 per share, excluding non-recurring items, $0.09 better than the S&P Capital IQ Consensus of $1.55; revenues fell 2.3% year/year to $17.1 bln vs the $17.57 bln S&P Capital IQ Consensus.
- Fourth quarter 2018 included a one-time benefit of $94 million, or $0.03 per share, recorded in the tax line in Corporate / Other, due to the finalization of the provisional component of the impact based on Citi's analysis as well as additional guidance received from the U.S. Treasury Department related to Tax Reform. Excluding the one-time impact of Tax Reform in both the current and the prior-year periods, net income of $4.2 billion increased 14%, primarily driven by a reduction in expenses, lower cost of credit and a lower effective tax rate, partially offset by lower revenues.
- Net Income $4.3 bln compared to expectations of $3.75 bln.
- RoE 9.4%; RoTCE 10.9%
- Efficiency Ratio 57.4%
- BVPS $75.05, TBVPS $63.79
- Citigroup's end-of-period loans were $684 billion as of quarter end, up 3% from the prior-year period. Excluding the impact of foreign exchange translation, Citigroup's end-of-period loans grew 4%, as 5% aggregate growth in ICG and Global Consumer Banking (GCB) was partially offset by the continued wind-down of legacy assets in Corporate / Other.
- Citigroup operating expenses of $9.9 billion in the fourth quarter 2018 decreased 4%, driven by lower compensation costs, efficiency savings and the wind-down of legacy assets, partially offset by investments and volume growth. Citigroup cost of credit in the fourth quarter 2018 was $1.9 billion, a 7% decrease, primarily driven by an episodic charge-off in ICG in the prior-year period.
- GCB revenues of $8.4 billion remained largely unchanged on a reported basis and increased 1% in constant dollars, driven primarily by growth in North America GCB and Latin America GCB, partially offset by a decline in Asia GCB.
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ICG revenues of $8.2 billion decreased 1%, as a decline in Markets and Securities Services more than offset growth in Banking.
- Fixed Income Markets revenues of $1.9 billion in the fourth quarter 2018 decreased 21%, reflecting a challenging trading environment characterized by volatile market conditions and widening credit spreads, particularly in December.
- Equity Markets revenues of $668 million increased 18%, reflecting the absence of an episodic loss incurred in the prior-year period.