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Citigroup (C) Misses Q4 EPS by 3c

January 15, 2015 7:59 AM EST

(Updated - January 15, 2015 8:01 AM EST)

Citigroup (NYSE: C) reported Q4 EPS of $0.06, $0.03 worse than the analyst estimate of $0.09. Revenue for the quarter came in at $17.8 billion versus the consensus estimate of $19.22 billion.

CVA/DVA4 was $7 million ($4 million after-tax) in the fourth quarter 2014, compared to negative $164 million (negative $100 million after-tax) in the prior year period. Fourth quarter 2013 results also included a $189 million after-tax benefit related to the divestiture of Citi’s Credicard business in Brazil and a $235 million after-tax charge related to the net fraud loss in Mexico.5 Excluding CVA/DVA and the items in the fourth quarter 2013, earnings were $0.06 per diluted share, compared to prior year earnings of $0.82 per diluted share.

Michael Corbat, Chief Executive Officer of Citigroup, said, "While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased our market share among our target institutional clients, grew our core loan book, and improved both our net interest revenue and margin from 2013 levels. For the first time since its establishment, Citi Holdings was profitable for the full year and we accelerated the utilization of our deferred tax assets. We strengthened our capital planning process and made Citi a safer and stronger institution, as evidenced by the increases to our capital, leverage and liquidity ratios. Although we made some difficult decisions over the course of the year, I believe they allowed us to put our franchise in a position to have a successful 2015."

Citigroup’s allowance for loan losses was $16.0 billion at quarter end, or 2.50% of total loans, compared to $19.6 billion, or 2.97% of total loans, at the end of the prior year period. The $441 million net release of loan loss reserves in the current quarter compared to a $670 million release in the prior year period. Citigroup asset quality continued to improve as total non-accrual assets fell to $7.4 billion, a 22% reduction compared to the fourth quarter 2013. Corporate non-accrual loans declined 38% to $1.2 billion, while consumer non-accrual loans declined 17% to $5.9 billion.

Citigroup’s loans were $645 billion as of quarter end, down 3% from the prior year period. On a constant dollar basis,8 Citigroup’s loans declined by 1%, as continued declines in Citi Holdings, driven primarily by reductions in the North America mortgage portfolio, offset 3% growth in Citicorp.

Citigroup’s deposits were $899 billion as of quarter end, down 7% from the prior year period. In constant dollars, Citigroup’s deposits were down 4%, primarily driven by the reclassification of $21 billion of deposits in Asia to other liabilities reflecting held-for-sale treatment as a result of Citigroup entering into an agreement to sell its retail banking business in Japan, as well as the continued reduction in Citi Holdings deposits.

Citigroup’s book value per share was $66.16 and its tangible book value per share was $56.83, each as of quarter end, representing 1% and 3% increases, respectively, versus the prior year period. At quarter end, Citigroup’s Basel III Common Equity Tier 1 Capital ratio was 10.5%, up from 10.1%9 in the prior year period. Citigroup’s estimated Basel III Supplementary Leverage ratio for the fourth quarter 2014 was 6.0%, up from 5.4% in the prior year period.

For earnings history and earnings-related data on Citigroup (C) click here.



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