Citigroup (C) Tops Q4 EPS by 1c

Citigroup (NYSE: C) reported Q4 EPS of $1.06, $0.01 better than the analyst estimate of $1.05. Revenue for the quarter came in at $18.6 billion versus the consensus estimate of $17.87 billion.

Michael Corbat, Chief Executive Officer of Citigroup, said, “Overall, we had strong performance during 2015. The $17.1 billion we generated in net income was the highest since 2006, when our company was very different in terms of headcount, footprint, mix of businesses and assets.

“Over the last three years, we have made substantial progress towards our targets and execution priorities. We significantly improved our returns on both assets and tangible common equity, as well as our Citicorp efficiency ratio. We have sharpened our focus on target clients, shedding over 20 consumer and institutional businesses in the process. Citi Holdings now consists of only 4% of our balance sheet and is profitable. And since the end of 2012 we have utilized over $7 billion of DTA.

“Having generated $50 billion in regulatory capital over the last three years, we have already exceeded regulatory thresholds for the Common Equity Tier 1 Capital and Supplementary Leverage ratios. This progress allowed us to begin returning meaningful capital to our shareholders. We have made sustainable investments not only in our capital planning process but also in the risk, control and compliance functions, which are critical to maintaining our license to do business. We have undoubtedly become a simpler, smaller, safer and stronger institution,” Mr. Corbat concluded.

Other financial highlights:

Citigroup’s allowance for loan losses was $12.6 billion at quarter end, or 2.06% of total loans, compared to $16.0 billion, or 2.50% of total loans, at the end of the prior year period. Total non-accrual assets fell 26% from the prior year period to $5.5 billion. Consumer non-accrual loans declined 38% to $3.7 billion, while corporate non-accrual loans increased 32% to $1.6 billion, primarily related to the previously disclosed third quarter 2015 actions related to the North America energy portfolio in ICG.

Citigroup’s loans were $618 billion as of quarter end, down 4% from the prior year period, and down 1% in constant dollars. In constant dollars, 5% growth in Citicorp loans was more than offset by continued declines in Citi Holdings, driven primarily by continued reductions in the North America mortgage portfolio and the sale of OneMain Financial, which was completed during the fourth quarter 2015.

Citigroup’s deposits were $908 billion as of quarter end, up 1%, and up 4% in constant dollars. In constant dollars, Citicorp deposits increased 5%, driven by a 9% increase in ICG deposits and a 2% increase in Global Consumer Banking (GCB) deposits. In constant dollars, Citi Holdings deposits declined 57%, driven by the transfer of MSSB deposits to Morgan Stanley, which was completed as of the end of the second quarter 2015.

Citigroup’s book value per share was $69.46 and tangible book value per share was $60.61, each as of quarter end, representing 5% and 7% increases, respectively. At quarter end, Citigroup’s Common Equity Tier 1 Capital ratio was 12.0%, up from 10.6% in the prior year period. Citigroup’s Supplementary Leverage Ratio for the fourth quarter 2015 was 7.1%, up from 5.9% in the prior year period. During the fourth quarter 2015, Citigroup repurchased approximately 31 million common shares and returned a total of $1.8 billion to common shareholders in the form of common share repurchases and dividends.

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

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