Citigroup reports steep fourth quarter losses tied to United States tax reform

Citigroup reports steep fourth quarter losses tied to United States tax reform”

However, adjusted earnings per share for the quarter beat analysts' estimates, while revenues were in line with expectations. Adjusted earnings per share were $1.28. and above analysts' average estimate of $1.19, according to Thomson Reuters I/B/E/S.

Citigroup reported a $18.3 billion loss in the fourth quarter on Tuesday as the financial conglomerate had to take more than $20 billion in accounting write-downs related to the new tax law.

Citigroup also took a $3 billion charge for foreign earnings it will bring back to the U.S. Unlike most of the other big banks, Citi has substantial foreign businesses - particularly in Mexico and Asia - and had been holding those earnings overseas waiting for favorable tax treatment.

Revenues for the quarter grew 1 percent to $17.26 billion from $17.01 billion in the prior year. Excluding these one-time charges, which were expected by analysts, the bank earned a profit of $3.7 billion, or $1.28 a share. It looks like GE is playing the same game by taking a $6.2 billion charge related to GE Capital and insurance on long-term care but the market isn't giving the beleaguered company the benefit of the doubt.

At the end of the period, loans totaled $667 billion, up 7% from the prior year period.

Institutional Clients Group revenue of $8.1B down 12% Y/Y. Institutional Clients Group revenue, which includes investment banking and trading, fell 1 percent, hurt by lower volatility in fixed income markets compared with a year ago when investors actively changed positions around the US presidential election. Corporate and other revenue fell to $746 million from $861 million in the year-ago quarter.

Citigroup's Common Equity Tier 1 (CET1) Capital ratio was 12.3%, down from 13.0% sequentially, driven primarily by the return of capital to common shareholders and the impact of tax reform.

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

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