Citigroup shares jumped Wednesday after fourth-quarter earnings beat estimates at the top and bottom line, reflecting broad-based strength at the bank.
“2024 was a critical year and our results show that our strategy is meeting expectations and driving better results in our businesses. Our net income grew by nearly 40% to $12.7 billion and we exceeded our full-year revenue target, including record in services, wealth and personal banking in the US,” CEO Jane Fraser said in a press release.
The company’s shares rose 6.3 percent.
Here’s how the company fared against LSEG analyst consensus estimates:
- Earnings: $1.34 per share versus $1.22 expected
- Income: $19.58 billion versus expectations of $19.49 billion
Citi posted net income of $2.86 billion, an improvement from a net loss of $1.84 billion a year ago, when its results were hit by a number of charge Citi booked in the last period of 2023. Revenues increased by 12% compared to the previous year.
The bank said it expects its return on tangible common equity to be between 10% and 11% in 2026 as it continues to invest and reshape its business. This range is below the aforementioned medium-term target of the bank of 11% to 12%.
Fraser called that level “a waypoint, not a destination” and said it should increase as the company continues to make internal investments.
“As CEO, I want this company to be set up for long-term success and to ensure that we have sufficient capacity to invest for that purpose,” Fraser said on a conference call with analysts.
“This level is a waypoint, not a destination. We intend to improve returns well above that level and deliver Citi’s full potential to our shareholders,” Fraser said.
Citi also announced a $20 billion share buyback. Chief Financial Officer Mark Mason said about $1.5 billion of that should happen during the first quarter.
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% from last year to $925 million. Citi said continued momentum in the issuance of investment-grade corporate debt helped strengthen that area of the business. As a result, total banking income increased by 12%, which expanded to 27% when the impact of loan protection is included.
Market revenues jumped 36% year-over-year to $4.58 billion, with growth in fixed income and equity businesses. The fixed income real estate market’s revenue of $3.48 billion was well above analysts’ estimates of $2.95 billion, according to StreetAccount.
Revenues for the wealth and services units grew 20% and 15%, respectively, year over year.
Citi’s cost of credit for the quarter was $2.59 billion. That’s 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 provision for loan losses, also down from prior periods.
Questions from Wall Street analysts on Wednesday’s conference call focused largely on Citi’s costs and progress on its turnaround. The company projected a slight decline in costs in 2025, which Mason indicated would include about $600 million in costs related to the company’s repositioning.
“We all want the transformation to happen quickly, and we want it to be done well. That’s why the costs have been increased temporarily – to make the investments to achieve that,” Fraser said.
The executive also said the planned initial public offering of Banamex, Bank of America’s retail business in Mexico, may not happen until 2026.
Citi stock has performed well in 2024, rising nearly 37% year-to-date. Shares are up more than 4% this year since Wednesday’s entry.