Citigroup (C.US) Q4 beats expectations as all five businesses drive growth, marking a significant turnaround from the previous year's losses.
1min read Citigroup (C.US) reported its fourth-quarter earnings on Wednesday. The bank's Q4 revenue was US$19.58bn, up 12% YoY, topping market expectations; its net profit was US$2.9bn, compared with a loss of US$1.8bn in the same period last year; and its EPS was US$1.34, topping market expectations of US$1.22.Citigroup's five main businesses all saw revenue growth. Among them, revenue from the market business grew 36% YoY to US$4.6bn, driven by fixed-income and equity trading. Fixed-income trading revenue surged 37% YoY to US$3.5bn, topping analysts' average expectation of US$2.94bn; equity trading revenue grew 34% YoY to US$1.1bn.Although revenue from loans and bond underwriting was lower than expectations, revenue from investment banking and stock underwriting exceeded expectations.However, Citigroup lowered a key profit target, which is the core of CEO Jane Fraser's reform plan.According to a statement, the bank now expects its tangible common equity return on tangible assets (ROTCE) to be between 10% and 11% in 2026, down from the previous expectation of 11% to 12%.Citigroup's move confirmed analysts' warnings that the bank may find it difficult to control expenses during its reform of its global business and strengthening of internal controls.Despite this, Fraser is still seeking to improve investors' returns. On Wednesday, she announced that the company's board had approved a plan to allow Citigroup to repurchase US$20bn worth of shares over the next few years.Fraser told investors at the beginning of 2022 that she needed five years to turn Citigroup around, which is the only major US bank whose market value is lower than five years ago. The bank's tangible common equity return in 2024 was 7%. In contrast, its rival Morgan Stanley reported a return of 22% on Wednesday.Fraser mentioned the revised target in the statement: "It's a milestone, not the finish line. We intend to take the return rate to a level well above this target and fully unlock Citigroup's potential for shareholders."As of the time of writing, Citigroup's stock price rose 3.6% before the market opened.
