Citigroup Reports Lower Profit But is Optimistic About The Economy
Citigroup did see a decline in sales in the fourth quarter, which weighed on its bottom line, but it is optimistic about the global economy and has slightly reduced the amounts set aside for possible delinquencies accordingly.
After inflating its provisions by billions to deal with potential defaults from customers affected by the pandemic, the US bank reduced them by $ 46 million in the fourth quarter.
This decision is justified by the improvements in the outlook for global gross domestic product as well as by a drop in the rating downgrades of financial assets in our portfolios, ”the bank said.
It is also motivated by lower losses in retail banking, she added.
The group, however, saw its turnover decline by 10% in the fourth quarter, to 16.5 billion dollars, with a decline in activity observed in both retail banking and institutional clients.
Its net profit consequently fell 7% to $ 4.6 billion.
Reported by shares and excluding special items, it stands at $ 2.08, which is well above the $ 1.34 expected by analysts.
Over the year as a whole, the bank’s turnover was stable at $ 74.3 billion. Its net profit fell 41% to $ 11.4 billion. Reported per share, it is also higher than forecasts (4.87 dollars against 4.25 dollars expected).
“A sign of the strength and sustainability of our diversified activity, our revenues have remained stable compared to 2019 despite the massive economic impact of COVID-19,” said the bank’s chief executive, Mike Corbat, in the communicated. He will be replaced in February by Jane Fraser, who will become the first woman to head a major Wall Street bank.
Citigroup stock fell 1.7% in electronic trading before the New York Stock Exchange opened.
JPMorgan Chase, the leading US bank by assets, also said on Friday that it had reduced its provisions for bad debts but it also reported a record profit in the fourth quarter thanks in particular to the good health of its merchant and investment bank.