Citigroup misses 4th-quarter revenue forecasts as bond trading disappoints

• Citigroup reported mixed fourth-quarter earnings on Friday that were hurt by weaker-than-expected fixed-income trading revenues. 
• The bank reported profits that beat analyst estimates, but revenue fell short.
• Citigroup saw weakness in its consumer banking arm, with revenues down 14%.
• Shares of Citigroup fell more than 1% in early trading.
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Citgroup’s fourth-quarter earnings report released on Friday came in below analyst estimates for revenue, but beat on bottom-line earnings.

Fixed-income sales and trading – one of Citi’s historically strong areas – were a particular weak spot in the quarter. The division reported revenue of $3.09 billion, missing the consensus estimate of $3.2 billion. Still, equities sales and trading and investment banking revenues came in above forecasts.

Shares of Citigroup fell more than 1% following the results.

Here are other key numbers:

Revenue: $16.5 billion, versus the average analyst estimate of $16.72 billion 
Adjusted earnings per share: $2.08, versus the average analyst estimate of $1.33
Net Income: $4.6 billion

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Further, The bank saw a 14% decline in its consumer-banking unit, which was partly offset by a 13% surge in its trading division. Revenue fell 10% from the year-ago period, while net income fell 3% over the same time period.

Citigroup's allowance for credit lossed on loans stood at $25 billion at quarter end, or about 3.73% of total loans, representing a surge of almost 100% from the prior year period. The surge was driven by the economic fallout from the COVID-19 pandemic. 

Citigroup CEO Michael Corbat said in a statement, "We ended a tumultuous year with a strong fourth quarter. As a sign of the strength and durability of our diversified franchise, our revenues were flat to 2019, despite the massive economic impact of COVID-19.

He continued: "Given the Federal Reserve decision regarding share repurchases as we have excess capital we can return to shareholders, we plan to resume buybacks during the current quarter."

The Friday earnings report helped kick off the fourth quarter earnings season for corporations, which will help shed light on how well businesses are recovering from the COVID-19 induced recession.  JPMorgan and Wells Fargo also reported their earnings on Friday, and Goldman Sachs is set to release their earnings report Tuesday before the market open. 

Also on Friday, JPMorgan beat its earnings estimates as the bank saw revenue derived from its trading unit surge.

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