Citigroup profits fell on higher provisions, slower deals

13 Jan 2023

Riyadh - Maaal

The Citigroup sign is seen outside the Citigroup Center in New York, October 1, 2007. Citigroup Inc, the largest U.S. bank by market value, said on Monday its quarterly earnings will drop 60 percent on $5.9 billion in losses and write-downs from subprime and leveraged loan woes, fixed income trading, as well as weakness in its consumer business. REUTERS/Shannon Stapleton (UNITED STATES) - RTR1UH9U

Citigroup Bank announced today, Friday, a decline in its profits in the fourth quarter, with an increase in provisions in anticipation of the deterioration of economic conditions, and with a decrease in revenues from investment banking services due to a significant decrease in deal-making activities.

According to “Reuters”, Citi’s shares fell about 3 percent in pre-opening trading, after fears of a possible recession prompted Citi to add $640 million to its reserves in the fourth quarter.

This compares to the bank releasing $1.37 billion from its reserves in 2021 when pandemic-related loan losses did not materialize.

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Citi’s investment banking revenue plunged 58 percent amid a significant slowdown in mergers and acquisitions activity last year as companies avoided deals, rising interest rates, the war in Ukraine and heightened economic uncertainty.

However, dealers resorted to realigning their portfolios in the face of the increasing volatility, which boosted Citi’s activities in the markets. Citi’s revenues jumped 6 percent to $18 billion

Net profit amounted to $2.5 billion, equivalent to $1.16 per share, for the three months ended December 31, compared to $3.2 billion, or $1.46 per share, in the same period a year earlier.