Citi profit climbs 25% but disappoints Wall Street
Citigroup Inc. posted a 25% jump in fourth-quarter profit as its new management struggles to restructure the bank and overcome lingering woes from the mortgage meltdown.
Citi said Thursday that it earned $1.2 billion, or 38 cents a share, in the fourth quarter, up from $956 million, or 31 cents, in the same period in 2011.
Excluding restructuring and other one-time accounting charges, Citi earned 69 cents a share in the fourth quarter.
But the bank’s profit fell short of Wall Street expectations, according to analysts polled by Bloomberg News who estimated per-share earnings of 96 cents.
Citi’s fourth-quarter results were dragged down in part by $1.3 billion in legal costs and related expenses.
“Our bottom-line earnings reflect an environment that remains challenging,” Chief Executive Michael Corbat said in a statement.
He added: “It will take some time to work through the challenges of the current environment but realizing our core earnings potential, as well as improving our returns on assets and tangible equity, are critical goals going forward.”
For all of 2012, Citi’s profit declined 32%. The bank reported $7.5 billion, or $2.44 a share, in profit last year, down from $11.1 billion, or $3.63, in 2011.
Citi’s earnings report was the company’s first quarterly financial report since the bank’s board installed Corbat as CEO last year.
Vikram Pandit, Citi’s former CEO, abruptly resigned after the company posted third-quarter earnings in October last year. Pandit’s departure reportedly resulted from a long-simmering dispute with the board.
In December, Citi announced plans to lay off more than 11,000 employees as part of broader restructuring that analysts predict will only involve more layoffs. The planned cuts account for 4% of its global workforce of 261,000.
Citi’s stock lost 84 cents, or 2%, to $41.64 a share in pre-market trading Thursday on Wall Street.