Citigroup (NYSE:C) stock fell Wednesday after the bank posted a mixed fourth quarter, with earnings beating expectations but revenue missing estimates.
Divestiture-related losses tied to its Russia exit and rising expenses overshadowed strong net interest income growth and robust investment banking momentum.
The bank reported fourth-quarter revenue (net of interest expense) of $19.87 billion, up 2% year over year but below the analyst consensus of $20.53 billion. Excluding divestiture-related impacts tied to the planned sale of AO Citibank in Russia, revenue increased 8%.
Net income declined 13% year over year to $2.5 billion, reflecting a $1.1 billion after-tax loss related to the Russia exit. Adjusted net income totaled $3.6 billion, while adjusted earnings per share came in at $1.81, exceeding expectations of $1.68.
Net interest income rose 14%, supported by strength across Markets, U.S. Personal Banking, Services, Wealth, Legacy Franchises, and Banking, partially offset by a decline in Corporate/Other. Non-interest revenue fell 27%, driven by weakness in Legacy Franchises, Markets, U.S. Personal Banking, and Wealth, partly offset by gains in Banking and Services. Operating expenses increased 6% to $13.8 billion, pushing the efficiency ratio up 250 basis points year over year to 69.6%.
Return on average tangible common equity declined 100 basis points to 5.1%. The Common Equity Tier 1 capital ratio stood at 13.2% for the quarter, approximately 160 basis points above the current regulatory requirement. Cost of credit rose 2% to $2.2 billion, primarily reflecting higher net credit losses in U.S. cards.
By segment, Services revenue increased 15% to $5.9 billion. Excluding the Russia-related item, growth was 8%, driven by continued expansion in Treasury and Trade Solutions and Securities Services. Markets revenue declined 1% to $4.5 billion, reflecting lower fixed income and equity markets activity.
Banking revenue surged 78% to $2.2 …