Citigroup Q4 Earnings Beat, Revenues Match Estimates, Stock Up

Citigroup Inc.’s C fourth-quarter 2024  adjusted net income per share of $1.34 surpassed the Zacks Consensus Estimate of $1.25. The company had incurred a loss of $1.16 in the fourth quarter of 2023.For 2024, adjusted net income per share was $4.04 compared with $5.94 reported in 2023.Shares of the company gained almost 5.6% in pre-market trading on better-than-expected results, driven by solid investment banking (IB) business performance.Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.As expected, Citigroup posted a year-over-year increase of 35% in IB revenues, driven by strength in Debt Capital Markets. The company also witnessed a rise in total loan balance in the quarter. However, the deposit balance declined sequentially.Net income (GAAP basis) in the quarter was $2.9 billion against a loss of $1.8 billion in the prior-year quarter.For 2024, the company reported net income of $12.7 billion, up 37.4% year over year.Citigroup’s Revenues Increase, Expenses DecreaseRevenues, net of interest expenses, moved up 12.3% year over year to $19.6 billion in the fourth quarter. The top line matched the Zacks Consensus Estimate.Full-year revenues, net of interest expenses, aggregated to $81.2 billion, up 3% year over year.Net Interest Income (NII) fell marginally year over year to $13.7 billion, while non-interest revenues (NIR) increased 62% to $5.8 billion.Citigroup’s operating expenses declined 18% year over year to $13.2 billion. This decrease in expenses was primarily due to savings associated with the company’s organizational simplification and stranded cost reductions, partially offset by volume-related expenses, continued investments in transformation and other risks, and control initiatives.Citigroup’s Segmental PerformanceIn the Services segment, total revenues, net of interest expenses, were $5.17 billion in the reported quarter, up 15% year over year. The increase primarily reflects a smaller impact from the Argentina currency devaluation and continued momentum across Treasury and Trade Solutions and Securities Services, both of which continued to gain market share this year. The Markets segment’s revenues increased 36% year over year to $4.6 billion, driven by growth in Fixed Income and Equity markets revenues.Banking revenues of $1.24 billion moved up 27% year over year, primarily driven by growth in IB.U.S. Personal Banking’s revenues were $5.2 billion, up 6% from the prior-year quarter, driven by higher net interest income growth in Interchange fees. In the Wealth segment, revenues were $2 billion in the reported quarter, rising 20.4% year over year. The increase was driven by a 22% rise in non-interest revenues, reflecting higher investment fee revenues on growth in client investment assets, as well as a 20% jump in net interest income due to higher average deposit spreads and volumes.Revenues in the All Other segment declined 34% year over year to $1.35 billion.Citigroup’s Balance Sheet PositionAt the end of the fourth quarter, Citigroup’s deposits were down 1.8% from the prior quarter’s levels to $1.28 trillion. Nonetheless, its loans increased marginally on a sequential basis to $694.5 billion.Citigroup's Credit Quality ImprovesTotal non-accrual loans fell 16% year over year to $2.7 billion. C’s provisions for credit losses and benefits and claims for the fourth quarter were $2.59 billion, down 27% from the year-earlier quarter.Nonetheless, the allowance for credit losses on loans was $18.5 billion, down 2% from the prior-year quarter’s levels.Citigroup's Capital Position StrongAt the end of the fourth quarter, the bank’s Common Equity Tier 1 capital ratio was 13.6%, up from 13.4% in the fourth quarter of 2023. The company’s supplementary leverage ratio in the reported quarter was 5.8%, which remained unchanged from the prior-year quarter.C's Solid Capital DeploymentIn the reported quarter, Citigroup returned $2.1 billion to shareholders through common share dividends and share repurchases.Citigroup's 2025 OutlookManagement expects revenues in the band of $83.5-$84.5 billion, driven by fee growth in the Services segment and a strong IB business.NII (excluding Markets) is projected to be slightly up on a year-over-year basis.Management anticipates expenses to be slightly lower than $53.8 billion.Our Viewpoint on CitigroupThe company’s fourth-quarter 2024 results have reflected strength, driven by higher loan balances and lower expenses. The company’s revenue growth was largely driven by strength across businesses, particularly in Services, Banking, U.S. Personal Banking and Markets, offset by a decline in All Other segment revenues.The business transformation initiatives, including its consumer business exits and organizational simplification efforts, will help it in the long run. Focus on growth in the profitable business while eliminating non-viable segments will likely aid results in the long run.Citigroup Inc. Price, Consensus and EPS Surprise Citigroup Inc. price-consensus-eps-surprise-chart | Citigroup Inc. QuoteCurrently, Citigroup carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Dates & Expectations of BanksM&T Bank Corporation MTB is slated to report fourth-quarter 2024 results on Jan. 16. It has a Zacks Rank #3 (Hold) at present.Over the seven days, the Zacks Consensus Estimate for MTB’s quarterly earnings per share has remained unchanged at $3.70.Fifth Third Bancorp FITB is scheduled to release fourth-quarter 2024 earnings on Jan. 21. The company carries a Zacks Rank #3 (Hold) at present.The consensus estimate for FITB’s quarterly earnings has remained unchanged at 87 cents per share over the past seven days.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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