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.

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.