Citigroup posts larger than expected decline in Q4 net income

Citi posted a drop in quarterly net income amid a jump in credit losses and as it built up the lender's provisions, although higher interest rates resulted in mid-single digit growth on the topline.

Fourth quarter net income shrank by roughly 21% to reach $2.5bn, for a similar decline in earnings per share to $1.16 (consensus: $1.30).

Revenues net of interest expenses on the other hand rose by 6% year-on-year to $18.0bn.

Chief executive officer, Jane Fraser, highlighted what she termed as another "excellent" quarter for Services, increased market share in Treasury and Trade Solutions and Securities Services and the best fourth quarter outcome in Markets "in recent memory".

"We intentionally designed a strategy that can deliver for our shareholders in different environments, and we are very much on track to reach the medium-term return targets we shared on Investor Day," Fraser said.

Citi's total cost of credit jumped from -$465m one year before to $1.85bn during the quarter.

A 36% jump in net credit losses to $1.18bn while the allowance for credit losses swung from -$1.37bn in the last quarter of 2021 to $640m.

The group's common equity Tier 1 capital ratio meanwhile improved from 12.2% to 13.0%.

As of 1428 GMT, shares of Citi had drifted lower by 1.08% to $48.50.