Citi beats estimates for fourth quarter earnings and revenues, but shares slip

Citigroup posted better-than-expected fourth quarter earnings and revenues despite meagre top-line growth as its fixed income operations underperformed.

The lender also exited from consumer banking in Asia during the quarter while refocusing its Mexican operations.

Citi boss, Jane Fraser, said: "With the announcement of our intention to focus our franchise in Mexico on our Institutional and Private Bank franchises, we have made the final decision related to the refresh of our strategy as it pertains to markets we intend to exit.

"We continue to make steady progress on executing our strategy as demonstrated most recently by the signing of an agreement to sell four consumer businesses in Asia."

Net income fell by 26% over the three months ending in December when compared to the year earlier period due to higher expenses, reaching $3.2bn, Citi said in a statement.

That resulted in a 24% drop in earnings per share to $1.24, versus analysts' estimates for EPS of $1.37.

Nevertheless, included in the above results was a $1.1bn hit, after taxes, linked to the sale of its four consumer banking units in Asia.

If not for that extraordinary item, the lender's EPS would have come in at $1.99 or 4% higher than a year before, although that was partly thanks to a 4% reduction in the number of shares outstanding.

Fixed income markets revenue was the weak link in Citi's results, falling by 20% to $2.5bn, while those from global consumer banking were off by 6% to $6.9bn.

Net interest income was flat during the quarter at $10.82bn (consensus: $10.41bn), but nevertheless beat the consensus on the Street.

Equity banking revenues dipped 3% to $785m, but those from investment banking jumped 43% to $1.8bn.

As of 1319 GMT, shares of Citigroup were falling by 3.59% to $65.17.