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Citigroup Inc Q4 2017 Earnings Struck By Massive Tax Charge

Citigroup Inc (NYSE:C) released its fourth-quarter earnings report before opening bell this morning. Citigroup Q4 2017 earnings amounted to $1.28 per share on an adjusted basis, while revenue came in at $17.3 billion. Analysts had been expecting earnings of $1.19 per share on $17.2 billion in revenue. In the same quarter a year ago, the firm reported $17 billion in revenue.

citigroup q4 2017 earnings
By http://www.citigroup.com/ [Public domain], via Wikimedia Commons

Tax-related charges wipe out Citigroup Q4 2017 earnings

Included in the Citigroup Q4 2017 earnings results is a non-cash tax charge amounting to $8.43 per share or $22 billion. The charge consisted of $19 billion from re-measurement of the firm’s deferred tax assets resulting from the lower U.S. corporate tax rate and the “shift to a territorial tax regime.” The other $3 billion is from the expected repatriation of earnings from the firm’s foreign subsidiaries. Because of that charge, the firm reported a loss of $7.15 per share, versus the $1.15 per share in earnings it posted in the same quarter a year ago.

Allowance for loan losses rose to $12.4 billion at the end of the fourth quarter from $12.1 billion in the same quarter a year ago. Loans rose 7% year over year to $667 billion, while deposits grew 3% to $960 billion as of the end of the quarter.

Citigroup’s investment banking revenue grows

Institutional clients group revenue ticked down to $8.1 billion from $8.2 billion in the year previously. Investment banking revenue rose 10% year over year to $1.2 billion, while Treasury and trade solutions revenue rose 9% to $2.2 billion. Fixed income revenue fell 18% to $2.4 billion, while equity markets revenue fell 23% to $530 million.

Citigroup’s global consumer banking revenue rose to $8.4 billion from $8 billion in the year-ago quarter. Corporate and other revenue fell to $746 million from $861 million in the year-ago quarter.

The firm returned $6.3 billion in capital to shareholders during the fourth quarter and $17.1 billion in all of 2017. It repurchased 74 million common shares during the quarter and 214 million in all of 2017.

Following the release of the Citigroup Q4 2017 earnings results, the firm’s stock jumped by about 3% to $79.15 in premarket trading.