Citi Reports $1.8 Billion Net Loss Partly From FDIC Bank Failure Assessment

Citigroup reported a net loss of $1.8 billion for the fourth quarter, attributing that in part to several “notable items.”

The items include a special assessment from the Federal Deposit Insurance Corp. (FDIC) due to the bank failures in 2023, a reserve build associated with transfer risk in Russia and Argentina, pre-tax revenue impact from a devaluation of the Argentine peso, and a restructuring charge related to the bank’s organizational changes, Citigroup said in a Friday (Jan. 12) press release.

Excluding those items, the diluted earnings per share would have been 84 cents for the quarter rather than a net loss of $1.16 per diluted share, according to the release.

“While these items are clearly very painful, they are quite idiosyncratic in nature and will not impact the course we have set,” Citi CEO Jane Fraser said Friday during the company’s quarterly earnings call.

Citi began simplifying its organizational structure in September, making what Fraser described during the call as the most consequential changes it has made since the financial crisis. It will conclude this project by the end of the first quarter.

When announcing the restructuring of its organization in September, Citi said the new structure would elevate the leaders of its five businesses while also eliminating a number of management layers.

“2023 was a foundational year in which we made substantial progress simplifying Citi and executing the strategy we laid out at Investor Day,” Fraser said during Friday’s earnings call. “With that said, the fourth quarter was clearly very disappointing.”

Highlighting trends seen during the fourth quarter in the bank’s different businesses, Fraser said Services revenues rose 16% as Citi gained share and won clients, according to the press release.

In its Markets business, the bank saw a slowdown in fixed income results and a “decent” quarter in equities, the release said.

Investment Banking revenue picked up during the quarter, though it continued to be affected by a weak wallet globally, per the release.

Wealth revenues were down during 2023, according to the release.

Fraser said during the call that Citi is well positioned to support its clients in any environment, including a run-of-the-mill recession, if there should be one.

“I also want to note that we were a source of strength with the system and for clients during a volatile period for the banking sector and geopolitically, and I’m very proud of how our people around the world performed during challenging times,” Fraser said. “2024 looks to be similar to 2023 in terms of the macro environment, with moderating rates and inflation.”