Citigroup Shares jumped on Wednesday after fourth-quarter earnings beat estimates at the top and bottom line, reflecting broad strength across the bank.
“2024 was a critical year and our results show that our strategy is delivering and driving stronger performance in our business. Our net income increased nearly 40% to $12.7 billion and we exceeded our revenue target for the full year, including record years in services,” said the President. Executive Jane Fraser in a press release: “American Wealth and Personal Banking.”
The company’s shares rose by 6%.
Here’s how the company performed compared to LSEG analyst estimates:
- Earnings: $1.34 per share versus $1.22 expected
- profit: $19.58 billion compared to the expected $19.49 billion
Citi reported net income of $2.86 billion, an improvement from a net loss of $1.84 billion a year ago, when its results were hurt by a number of fees Citi booked in the final period of 2023. Revenue rose 12% year over year.
The bank said it expects its return on tangible common equity to range between 10% and 11% in 2026 as it continues to make investments and reshape its business. This range is lower than the bank’s previously announced medium-term target of 11% to 12%.
“This level is a waypoint, not a destination. We intend to improve returns well above this level and deliver Citi’s full potential to our shareholders,” Fraser said.
Citi also announced a $20 billion share buyback.
The bank reported growth in several different business units during the fourth quarter. Investment banking in particular was a bright spot, with revenue jumping 35% year over year to $925 million. Citi said continued momentum in issuing investment-grade corporate debt has helped boost this area of business. As a result, total banking revenues increased by 12%, expanding to 27% when adding the impact of loan hedges.
Markets revenue jumped 36% year-on-year to $4.58 billion, with fixed income and equities businesses growing. Fixed income markets revenue of $3.48 billion was well above the $2.95 billion that analysts had expected, according to StreetAccount.
Revenues from the wealth and services units increased by 20% and 15%, respectively, on an annual basis.
Citi’s cost of credit for the quarter was $2.59 billion. This is down from $3.55 billion a year ago and $2.68 billion in the third quarter. The bank added a net $203 million to its allowance for credit losses, which also decreased from prior periods.
On an analyst call later Wednesday, investors will look for progress updates on Fraser’s turnaround efforts. Fraser took over the bank in March 2021 and has focused on downsizing the company, including selling some international units.
Citi stock has had a strong performance in 2024, rising nearly 37% over the year. The stock is up more than 4% so far this year through Wednesday.