Citigroup Books Q4 2023 Loss, Private Bank Revenues Dip

Tom Burroughes

13 February 2024

reported a net loss of $1.8 billion in the fourth quarter of 2023 against a net income result of $2.51 billion a year before, with the total cost of credit surging 92 per cent to $3.547 billion, on the back of a 3 per cent year-on-year dip in total revenue.

Total operating costs rose 23 per cent in Q4 2023 to $16 billion, the US-listed bank said in a statement on Friday. The operating expenses included $1.7 billion of pre-tax and divestiture-related costs, as assessed by the FDIC. The bank has been in the process of offloading more than a dozen retail banking businesses around the world as part of a restructuring led by CEO Susan Fraser.

The bank had a total of $25 trillion of assets under custody and/or administration, up from $22 trillion at the end of 2022.

Return on tangible common equity was 13.4 per cent, down from 24.1 per cent a year earlier. At the end of December 2023, Citigroup had a Common Equity Tier 1 ratio – a standard international measure of a bank’s capital buffer – of 13.3 per cent.

Fraser said the Q4 result was “very disappointing” because of the impact of various factors. However, she noted that when divestitures were stripped out, revenues rose 4 per cent and the bank had met its full-year cost guidance. Its tangible book value per share rose 6 per cent to $86.19.

In a conference call, the bank told journalists (source: Bloomberg, 12 January, FT, others) that total headcount would fall by 60,000 jobs to 180,000 by the end of 2026. This includes the 20,000 roles to be part of of the group’s overhaul and the 40,000 staff who will depart when the US firm lists its consumer, small business and middle-market banking businesses in Mexico in an IPO.

Private bank
At the private banking side, Citigroup said private banking revenues, net of interest costs, fell 10 per cent to $542 million in Q4 2023. Throughout the whole wealth arm (private bank, Wealth at Work, and Citigold), the figure fell 3 per cent to $1.647 billion. Private banking revenues fell as a result of lower deposit spreads and weaker loan and deposit volumes. This was partly offset by higher investment revenue.

“Wealth revenues were down in 2023 and we fully recognise that this business isn’t where it needs to be,” Fraser said in the bank’s statement.

Net income in the wealth business shrank by 97 per cent to $5 million.