Citigroup Reports Fourth Quarter 2018 Financial Results
Citigroup Inc. (NYSE:C):
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NET INCOME OF $4.3 BILLION ($1.64 PER SHARE)
EXCLUDING THE IMPACT OF TAX REFORM5, NET
INCOME OF $4.2 BILLION
($1.61 PER SHARE)
REVENUES OF $17.1 BILLION
RETURNED $5.8 BILLION OF CAPITAL TO COMMON SHAREHOLDERS
($18.4
BILLION IN FULL YEAR 2018)
REPURCHASED 74 MILLION COMMON SHARES
(212 MILLION IN
FULL YEAR 2018)
BOOK VALUE PER SHARE OF $75.05
TANGIBLE BOOK VALUE PER
SHARE OF $63.796
Citigroup Inc. today reported net income for the fourth quarter 2018 of
$4.3 billion, or $1.64 per diluted share, on revenues of $17.1 billion.
This compared to a net loss of $18.9 billion, or $7.38 per diluted
share, on revenues of $17.5 billion for the fourth quarter 2017.
Fourth quarter 2017 included a one-time, non-cash charge of $22.6
billion, or $8.66 per share, recorded in the tax line related to the
enactment of the Tax Cuts and Jobs Act (Tax Reform). Fourth quarter 2018
included a one-time benefit of $94 million, or $0.03 per share, recorded
in the tax line in Corporate / Other, due to the finalization of the
provisional component of the impact based on Citi’s analysis as well as
additional guidance received from the U.S. Treasury Department related
to Tax Reform. Excluding the one-time impact of Tax Reform in both the
current and the prior-year periods, net income of $4.2 billion increased
14%, primarily driven by a reduction in expenses, lower cost of credit
and a lower effective tax rate, partially offset by lower revenues. On
this basis, earnings per share of $1.61 increased 26% from $1.28 per
diluted share in the prior-year period, driven by the growth in net
income and an 8% reduction in average diluted shares outstanding.
Citi CEO Michael Corbat said, “We made solid progress throughout 2018
towards our longer-term financial targets, ending the year with an RoTCE
of 10.9% and an efficiency ratio of 57%. Our institutional and consumer
franchises each grew revenue on a full year basis and we continued to
invest in our people and technology in order to better serve our
clients. During the year, we also grew loans and deposits, improved ROA,
and carefully managed both our expenses and balance sheet. We also
returned more than $18 billion of capital to common shareholders.
“A volatile fourth quarter impacted some of our market sensitive
businesses, particularly Fixed Income. However, our ICG accrual
businesses – Treasury and Trade Solutions, Securities Services, Private
Bank and Corporate Lending – continued their strong performance. And in
Global Consumer Banking, we had good underlying growth in U.S. Branded
Cards and solid performance from our franchise in Mexico where we have
been investing. For 2019, we remain committed to delivering a 12% RoTCE
and continuing to improve our operating efficiency during the year,” Mr.
Corbat concluded.
For the full year 2018, Citigroup reported net income of $18.0 billion
on revenues of $72.9 billion, compared to a net loss of $6.8 billion on
revenues of $72.4 billion for the full year 2017. Excluding the one-time
impact of Tax Reform, Citigroup net income of $18.0 billion increased
14% compared to the prior year.
Throughout the remainder of this press release, net income and
Citigroup’s effective tax rate are presented on a reported and adjusted
basis, excluding the one-time impact of Tax Reform in both the current
and prior year periods. For additional information on these adjustments
as well as other non-GAAP financial measures used in this press release,
see the Appendices and Footnotes to this release. Percentage comparisons
throughout this press release are calculated for the fourth quarter 2018
versus the fourth quarter 2017, unless otherwise specified.
Citigroup ($ in millions, except as otherwise noted) |
4Q'18 | 3Q'18 | 4Q'17 | QoQ% | YoY% | 2018 | 2017 | %r | |||||||||||||||||
Global Consumer Banking | 8,440 | 8,654 | 8,449 | (2)% | - | 33,777 | 32,838 | 3% | |||||||||||||||||
Institutional Clients Group | 8,214 | 9,241 | 8,304 | (11)% | (1)% | 36,994 | 36,474 | 1% | |||||||||||||||||
Corporate / Other | 470 | 494 | 751 | (5)% | (37)% | 2,083 | 3,132 | (33)% | |||||||||||||||||
Total Revenues | $17,124 | $18,389 | $17,504 | (7)% | (2)% | $72,854 | $72,444 | 1% | |||||||||||||||||
Expenses | $9,893 | $10,311 | $10,332 | (4)% | (4)% | $41,841 | $42,232 | (1)% | |||||||||||||||||
Net Credit Losses | 1,786 | 1,756 | 1,880 | 2% | (5)% | 7,113 | 7,076 | 1% | |||||||||||||||||
Credit Reserve Build / (Release)(a) | 111 | 192 | 165 | (42)% | (33)% | 354 | 266 | 33% | |||||||||||||||||
Provision for Benefits and Claims | 28 | 26 | 28 | 8% | - | 101 | 109 | (7)% | |||||||||||||||||
Total Cost of Credit | $1,925 | $1,974 | $2,073 | (2)% | (7)% | $7,568 | $7,451 | 2% | |||||||||||||||||
Income from Continuing Operations Before Taxes | $5,306 | $6,104 | $5,099 | (13)% | 4% | $23,445 | $22,761 | 3% | |||||||||||||||||
Provision for Income Taxes | 1,001 | 1,471 | 23,864 | (32)% | (96)% | 5,357 | 29,388 | (82)% | |||||||||||||||||
Income (Loss) from Continuing Operations | $4,305 | $4,633 | $(18,765) | (7)% | NM | $18,088 | $(6,627) | NM | |||||||||||||||||
Net Income (Loss) from Discontinued Operations | (8) | (8) | (109) | - | 93% | (8) | (111) | 93% | |||||||||||||||||
Non-Controlling Interest | (16) | 3 | 19 | NM | NM | 35 | 60 | (42)% | |||||||||||||||||
Citigroup Net Income (Loss) | $4,313 | $4,622 | $(18,893) | (7)% | NM | $18,045 | $(6,798) | NM | |||||||||||||||||
Adjusted Net Income(b) | $4,219 | $4,622 | $3,701 | (9)% | 14% | $17,951 | $15,796 | 14% | |||||||||||||||||
Revenues | |||||||||||||||||||||||||
North America | 8,063 | 8,458 | 8,228 | (5)% | (2)% | 33,458 | 34,193 | (2)% | |||||||||||||||||
EMEA | 2,633 | 2,927 | 2,441 | (10)% | 8% | 11,770 | 10,879 | 8% | |||||||||||||||||
Latin America | 2,439 | 2,725 | 2,390 | (10)% | 2% | 10,264 | 9,607 | 7% | |||||||||||||||||
Asia | 3,519 | 3,785 | 3,694 | (7)% | (5)% | 15,279 | 14,633 | 4% | |||||||||||||||||
Corporate / Other | 470 | 494 | 751 | (5)% | (37)% | 2,083 | 3,132 | (33)% | |||||||||||||||||
EOP Assets ($B) | 1,917 | 1,925 | 1,842 | - | 4% | 1,917 | 1,842 | 4% | |||||||||||||||||
EOP Loans ($B) | 684 | 675 | 667 | 1% | 3% | 684 | 667 | 3% | |||||||||||||||||
EOP Deposits ($B) | 1,013 | 1,005 | 960 | 1% | 6% | 1,013 | 960 | 6% | |||||||||||||||||
Common Equity Tier 1 Capital Ratio(3) | 11.9% | 11.7% | 12.4% | ||||||||||||||||||||||
Supplementary Leverage Ratio(3) | 6.4% | 6.5% | 6.7% | ||||||||||||||||||||||
Return on Average Common Equity | 9.0% | 9.6% | (37.5)% | ||||||||||||||||||||||
Book Value per Share | $75.05 | $72.88 | $70.62 | 3% | 6% | ||||||||||||||||||||
Tangible Book Value per Share | $63.79 | $61.91 | $60.16 | 3% | 6% |
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information. |
|
(a) Includes provision for unfunded lending commitments. | |
(b) Excludes the impact of Tax Reform in 4Q'18, 4Q'17, full year 2018 and full year 2017. For additional information, please refer to Appendix A and Footnote 5. |
Citigroup
Citigroup
revenues of $17.1 billion in the fourth quarter 2018 decreased 2%,
primarily reflecting lower revenues in Fixed Income Markets
within the Institutional Clients Group (ICG), as well as
the wind-down of legacy assets in Corporate / Other.
Citigroup operating expenses of $9.9 billion in the fourth
quarter 2018 decreased 4%, driven by lower compensation costs,
efficiency savings and the wind-down of legacy assets, partially offset
by investments and volume growth.
Citigroup cost of credit in the fourth quarter 2018 was
$1.9 billion, a 7% decrease, primarily driven by an episodic charge-off
in ICG in the prior-year period.
Citigroup net income increased to $4.2 billion in the fourth
quarter 2018, excluding the impact of Tax Reform, primarily driven by
the lower expenses and cost of credit as well as the lower effective tax
rate, partially offset by the decrease in revenues. Including the impact
of Tax Reform, Citigroup’s effective tax rate was 19% in the current
quarter and was not meaningful in the fourth quarter 2017. Excluding the
impact of Tax Reform, Citigroup’s effective tax rate was 21% in the
current quarter compared to 25% in the fourth quarter 2017.
Citigroup’s allowance for loan losses was $12.3 billion at
quarter end, or 1.81% of total loans, compared to $12.4 billion, or
1.86% of total loans, at the end of the prior-year period. Total
non-accrual assets declined 24% from the prior-year period to $3.6
billion. Consumer non-accrual loans declined 17% to 2.2 billion and
corporate non-accrual loans decreased 32% to $1.3 billion.
Citigroup’s end-of-period loans were $684 billion as of quarter
end, up 3% from the prior-year period. Excluding the impact of foreign
exchange translation7, Citigroup’s end-of-period loans grew
4%, as 5% aggregate growth in ICG and Global Consumer Banking
(GCB) was partially offset by the continued wind-down of legacy
assets in Corporate / Other.
Citigroup’s end-of-period deposits were $1.0 trillion as of
quarter end, an increase of 6% from the prior-year period. Excluding the
impact of foreign exchange translation, Citigroup’s end-of-period
deposits grew 7%, driven by 10% growth in ICG.
Citigroup’s book value per share of $75.05 and tangible book
value per share of $63.79, both as of quarter end, increased 6% from the
prior-year period driven by the benefit of a lower share count. At
quarter end, Citigroup’s CET1 Capital ratio was 11.9%, up from 11.7% in
the prior quarter, driven by a reduction in risk-weighted assets.
Citigroup’s SLR for the fourth quarter 2018 was 6.4%, down from 6.5% in
the prior quarter. During the fourth quarter 2018, Citigroup repurchased
74 million common shares and returned a total of $5.8 billion to common
shareholders in the form of common share repurchases and dividends.
Global Consumer Banking
($ in millions, except as otherwise noted) |
4Q'18 | 3Q'18 | 4Q'17 | QoQ% | YoY% | 2018 | 2017 | %r | |||||||||||||||||
North America | 5,254 | 5,129 | 5,182 | 2% | 1% | 20,544 | 20,270 | 1% | |||||||||||||||||
Latin America(a) | 1,362 | 1,670 | 1,359 | (18)% | - | 5,760 | 5,222 | 10% | |||||||||||||||||
Asia(b) | 1,824 | 1,855 | 1,908 | (2)% | (4)% | 7,473 | 7,346 | 2% | |||||||||||||||||
Total Revenues | $8,440 | $8,654 | $8,449 | (2)% | - | $33,777 | $32,838 | 3% | |||||||||||||||||
Expenses | $4,593 | $4,661 | $4,563 | (1)% | 1% | $18,590 | $18,003 | 3% | |||||||||||||||||
Net Credit Losses | 1,744 | 1,714 | 1,640 | 2% | 6% | 6,920 | 6,562 | 5% | |||||||||||||||||
Credit Reserve Build / (Release)(c) | 71 | 192 | 175 | (63)% | (59)% | 563 | 963 | (42)% | |||||||||||||||||
Provision for Benefits and Claims | 28 | 27 | 36 | 4% | (22)% | 103 | 116 | (11)% | |||||||||||||||||
Total Cost of Credit | $1,843 | $1,933 | $1,851 | (5)% | - | $7,586 | $7,641 | (1)% | |||||||||||||||||
Net Income | $1,519 | $1,566 | $580 | (3)% | NM | $5,755 | $3,869 | 49% | |||||||||||||||||
Adjusted Net Income(d) | $1,519 | $1,566 | $1,330 | (3)% | 14% | $5,755 | $4,619 | 25% | |||||||||||||||||
Retail Banking(a) | 3,388 | 3,717 | 3,457 | (9)% | (2)% | 14,065 | 13,481 | 4% | |||||||||||||||||
Cards | 5,052 | 4,937 | 4,992 | 2% | 1% | 19,712 | 19,357 | 2% | |||||||||||||||||
Total Revenues | $8,440 | $8,654 | $8,449 | (2)% | - | $33,777 | $32,838 | 3% | |||||||||||||||||
Key Indicators ($B) | |||||||||||||||||||||||||
Retail Banking Average Loans | 145 | 146 | 145 | (1)% | - | 146 | 143 | 2% | |||||||||||||||||
Retail Banking Average Deposits | 307 | 307 | 307 | - | - | 307 | 306 | - | |||||||||||||||||
Investment AUMs | 158 | 169 | 161 | (6)% | (2)% | 158 | 161 | (2)% | |||||||||||||||||
Cards Average Loans | 163 | 161 | 158 | 2% | 3% | 160 | 154 | 4% | |||||||||||||||||
Cards Purchase Sales | 144 | 135 | 136 | 7% | 6% | 534 | 499 | 7% |
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information. |
|
(a) Includes gain of approximately $250 million related to the sale of an asset management business in 3Q'18. |
|
(b) Asia GCB includes the results of operations of GCB activities in certain EMEA countries for all periods presented. |
|
(c) Includes provision for unfunded lending commitments. | |
(d) Excludes the impact of Tax Reform in 4Q'17 and full year 2017. For additional information, please refer to Appendix A and Footnote 5. |
|
Global Consumer Banking
GCB
revenues of $8.4 billion remained largely unchanged on a
reported basis and increased 1% in constant dollars, driven primarily by
growth in North America GCB and Latin America GCB,
partially offset by a decline in Asia GCB.
North America GCB revenues of $5.3 billion
increased 1%, as higher revenues in Citi Retail Services more
than offset lower revenues in Retail Banking, as Citi-Branded
Cards remained largely unchanged. Retail Banking revenues of
$1.3 billion decreased 1%. Excluding mortgage, Retail Banking
revenues increased 5%, driven by continued growth in deposit spreads,
partially offset by lower deposit volumes. Citi-Branded Cards
revenues of $2.2 billion remained largely unchanged, as growth in
interest-earning balances was offset by the impact of the Hilton
portfolio sale as well as the previously disclosed partnership terms. Citi
Retail Services revenues of $1.7 billion increased 6%, primarily
reflecting organic loan growth and the benefit of the L.L.Bean portfolio
acquisition.
Latin America GCB revenues of $1.4 billion remained
largely unchanged. In constant dollars, revenues increased 5%, or 7%
excluding revenues associated with an asset management business in
Mexico that was sold in the third quarter 2018. On this basis, retail
banking revenues grew 6%, excluding the impact of the asset management
sale, driven by deposit growth, as well as improved deposit spreads.
Cards revenues grew 8%, driven by growth in purchase sales and loans.
Asia GCB revenues decreased 4% to $1.8 billion. In
constant dollars, revenues increased 1%, excluding a modest gain on sale
of a merchant acquiring business in the prior-year period. On this
basis, retail banking revenues declined 1%, reflecting lower investment
revenues, while cards revenues grew 3%, excluding the gain, driven by
growth in loans and purchase sales.
GCB operating expenses of $4.6 billion increased
1%. In constant dollars, expenses increased 2%, as investments and
volume-related expenses were partially offset by efficiency savings.
GCB cost of credit of $1.8 billion was largely
unchanged. In constant dollars, cost of credit increased 1%, driven by
an 8% increase in net credit losses, primarily reflecting volume growth
and seasoning in Citi-Branded Cards and Citi Retail Services
in North America GCB.
GCB net income of $1.5 billion increased 14% on a
reported basis and 16% in constant dollars, excluding the impact of Tax
Reform, driven primarily by the lower effective tax rate.
Institutional Clients Group
($ in millions) |
4Q'18 | 3Q'18 | 4Q'17 | QoQ% | YoY% | 2018 | 2017 | %r | |||||||||||||||||
Treasury & Trade Solutions | 2,402 | 2,283 | 2,236 | 5% | 7% | 9,289 | 8,635 | 8% | |||||||||||||||||
Investment Banking | 1,278 | 1,181 | 1,293 | 8% | (1)% | 5,011 | 5,370 | (7)% | |||||||||||||||||
Private Bank | 797 | 849 | 776 | (6)% | 3% | 3,398 | 3,108 | 9% | |||||||||||||||||
Corporate Lending(a) | 559 | 563 | 513 | (1)% | 9% | 2,232 | 1,938 | 15% | |||||||||||||||||
Total Banking | 5,036 | 4,876 | 4,818 | 3% | 5% | 19,930 | 19,051 | 5% | |||||||||||||||||
Fixed Income Markets | 1,942 | 3,199 | 2,463 | (39)% | (21)% | 11,635 | 12,351 | (6)% | |||||||||||||||||
Equity Markets | 668 | 792 | 567 | (16)% | 18% | 3,427 | 2,879 | 19% | |||||||||||||||||
Securities Services | 653 | 672 | 612 | (3)% | 7% | 2,631 | 2,366 | 11% | |||||||||||||||||
Other(b) | (190) | (192) | (177) | 1% | (7)% | (674) | (40) | NM | |||||||||||||||||
Total Markets & Securities Services | 3,073 | 4,471 | 3,465 | (31)% | (11)% | 17,019 | 17,556 | (3)% | |||||||||||||||||
Product Revenues(a) | $8,109 | $9,347 | $8,283 | (13)% | (2)% | $36,949 | $36,607 | 1% | |||||||||||||||||
Gain / (Loss) on Loan Hedges | 105 | (106) | 21 | NM | NM | 45 | (133) | NM | |||||||||||||||||
Total Revenues | $8,214 | $9,241 | $8,304 | (11)% | (1)% | $36,994 | $36,474 | 1% | |||||||||||||||||
Expenses | $4,827 | $5,191 | $4,912 | (7)% | (2)% | $20,979 | $20,415 | 3% | |||||||||||||||||
Net Credit Losses | 45 | 23 | 225 | 96% | (80)% | 172 | 365 | (53)% | |||||||||||||||||
Credit Reserve Build / (Release)(c) | 84 | 48 | 42 | 75% | 100% | 12 | (380) | NM | |||||||||||||||||
Total Cost of Credit | $129 | $71 | $267 | 82% | (52)% | $184 | $(15) | NM | |||||||||||||||||
Net Income | $2,521 | $3,123 | $203 | (19)% | NM | $12,183 | $9,009 | 35% | |||||||||||||||||
Adjusted Net Income(d) | $2,521 | $3,123 | $2,203 | (19)% | 14% | $12,183 | $11,009 | 11% | |||||||||||||||||
Revenues | |||||||||||||||||||||||||
North America(b) | 2,809 | 3,329 | 3,046 | (16)% | (8)% | 12,914 | 13,923 | (7)% | |||||||||||||||||
EMEA | 2,633 | 2,927 | 2,441 | (10)% | 8% | 11,770 | 10,879 | 8% | |||||||||||||||||
Latin America | 1,077 | 1,055 | 1,031 | 2% | 4% | 4,504 | 4,385 | 3% | |||||||||||||||||
Asia | 1,695 | 1,930 | 1,786 | (12)% | (5)% | 7,806 | 7,287 | 7% |
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information. |
(a) Excludes gain / (loss) on credit derivatives as well as the mark-to-market on loans at fair value. For additional information, please refer to Footnote 8. |
(b) Includes gain of approximately $580 million related to the sale of a fixed income analytics business in 3Q'17. |
(c) Includes provision for unfunded lending commitments. |
(d) Excludes the impact of Tax Reform in 4Q'17 and full year 2017. For additional information, please refer to Appendix A and Footnote 5. |
Institutional Clients Group
ICG
revenues of $8.2 billion decreased 1%, as a decline in Markets
and Securities Services more than offset growth in Banking.
Banking revenuesof $5.1 billion
increased 6% (including gain / (loss) on loan hedges)8, as
continued growth across businesses more than offset a decline in Investment
Banking. Treasury and Trade Solutions revenues of $2.4
billion increased 7% on a reported basis and 11% in constant dollars,
reflecting continued growth in transaction volumes and deposits, as well
as improved spreads. Investment Banking revenues of $1.3 billion
decreased 1% versus the prior-year period, as strong growth in advisory
was more than offset by a decline in underwriting fees, reflecting lower
market activity. Advisory revenues increased 47% to $463 million, equity
underwriting revenues decreased 28% to $181 million and debt
underwriting revenues decreased 13% to $634 million. Private Bank
revenues increased 3% to $797 million, driven by growth in loans and
investments, as well as improved deposit spreads. Corporate Lending
revenues of $559 million increased 9% (excluding gain / (loss) on loan
hedges), reflecting loan growth as well as lower hedging costs.
Markets and Securities Services revenues of $3.1
billion decreased 11%, as weakness in Fixed Income Markets more
than offset growth in Securities Services and Equity Markets.
Fixed Income Markets revenues of $1.9 billion in the
fourth quarter 2018 decreased 21%, reflecting a challenging trading
environment characterized by volatile market conditions and widening
credit spreads, particularly in December. Equity Markets revenues
of $668 million increased 18%, reflecting the absence of an episodic
loss incurred in the prior-year period. Securities Services
revenues of $653 million increased 7% on a reported basis and 12% in
constant dollars, driven by continued growth in client volumes and
higher net interest revenue.
ICG net income of $2.5 billion increased
14%, excluding the impact of Tax Reform, driven primarily by the lower
effective tax rate, as well as lower cost of credit and expenses which
more than offset the lower revenues. ICG operating expenses
decreased 2% to $4.8 billion, primarily driven by a decrease in
performance-based compensation. ICG cost of credit of $129
million decreased 52%, primarily driven by the absence of an episodic
charge-off incurred in the prior-year period.
Corporate / Other
($ in millions) |
4Q'18 | 3Q'18 | 4Q'17 | QoQ% | YoY% | 2018 | 2017 | %r | |||||||||||||||||
Revenues | $470 | $494 | $751 | (5)% | (37)% | $2,083 | $3,132 | (33)% | |||||||||||||||||
Expenses | $473 | $459 | $857 | 3% | (45)% | $2,272 | $3,814 | (40)% | |||||||||||||||||
Net Credit Losses | (3) | 19 | 15 | NM | NM | 21 | 149 | (86)% | |||||||||||||||||
Credit Reserve Build / (Release)(a) | (44) | (48) | (52) | 8% | 15% | (221) | (317) | 30% | |||||||||||||||||
Provision for Benefits and Claims | - | (1) | (8) | 100% | NM | (2) | (7) | 71% | |||||||||||||||||
Total Cost of Credit | $(47) | $(30) | $(45) | (57)% | (4)% | $(202) | $(175) | (15)% | |||||||||||||||||
Income (Loss) from Continuing Operations before Taxes | $44 | $65 | $(61) | (32)% | NM | $13 | $(507) | NM | |||||||||||||||||
Net Income (Loss) | $273 | $(67) | $(19,676) | NM | NM | $107 | $(19,676) | NM | |||||||||||||||||
Adjusted Net Income (Loss)(b) |
$179 | $(67) | $168 | NM | 7% | $13 | $168 | (92)% |
(a) Includes provision for unfunded lending commitments. |
(b) Excludes the impact of Tax Reform in 4Q'18, 4Q'17, full year 2018 and full year 2017. For additional information, please refer to Appendix A and Footnote 5. |
Corporate / Other
Corporate
/ Other revenues of $470 million decreased 37% from the
prior-year period, driven by the wind-down of legacy assets.
Corporate / Other expenses of $473 million
decreased 45% from the prior-year period, driven by the wind-down of
legacy assets and lower infrastructure costs.
Corporate / Other income from continuing operations
before taxes of $44 million increased from a loss of $61 million in
the prior-year period, as the lower expenses more than offset the lower
revenues.
Citigroup will host a conference call today at 10:00 AM (ET). A live
webcast of the presentation, as well as financial results and
presentation materials, will be available at https://www.citigroup.com/citi/investor.
Dial-in numbers for the conference call are as follows: (866) 516-9582
in the U.S. and Canada; (973) 409-9210 outside of the U.S. and Canada.
The conference code for both numbers is 4793298.
Additional financial, statistical and business-related information, as
well as business and segment trends, is included in a Quarterly
Financial Data Supplement. Both this earnings release and Citigroup’s
Fourth Quarter 2018 Quarterly Financial Data Supplement are available on
Citigroup’s website at www.citigroup.com.
Citigroup, the leading global bank, has approximately 200 million
customer accounts and does business in more than 160 countries and
jurisdictions. Citigroup provides consumers, corporations, governments
and institutions with a broad range of financial products and services,
including consumer banking and credit, corporate and investment banking,
securities brokerage, transaction services, and wealth management.
Additional information may be found at www.citigroup.com
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Certain statements in this release are “forward-looking statements”
within the meaning of the rules and regulations of the U.S. Securities
and Exchange Commission (SEC). These statements are based on
management’s current expectations and are subject to uncertainty and
changes in circumstances. These statements are not guarantees of future
results or occurrences. Actual results and capital and other financial
condition may differ materially from those included in these statements
due to a variety of factors, including, among others, the efficacy of
Citi’s business strategies and execution of those strategies, such as
those relating to its key investment, efficiency and capital
optimization initiatives, governmental and regulatory actions or
approvals, various geopolitical and macroeconomic uncertainties,
challenges and conditions, for example, changes in monetary policies and
trade policies, and the precautionary statements included in this
release and those contained in Citigroup’s filings with the SEC,
including without limitation the “Risk Factors” section of Citigroup’s
2017 Form 10-K. Any forward-looking statements made by or on behalf of
Citigroup speak only as to the date they are made, and Citi does not
undertake to update forward-looking statements to reflect the impact of
circumstances or events that arise after the date the forward-looking
statements were made.
Appendix A | ||||||||||||||||
Citigroup | 4Q'18 | 3Q'18 | 4Q'17 | 2018 | 2017 | |||||||||||
($ in millions, except EPS) | ||||||||||||||||
Reported Net Income (Loss) | $4,313 | $4,622 | $(18,893) | $18,045 | $(6,798) | |||||||||||
Impact of: | ||||||||||||||||
Tax Reform | 94 | - | (22,594) | 94 | (22,594) | |||||||||||
Adjusted Net Income | $4,219 | $4,622 | $3,701 | $17,951 | $15,796 | |||||||||||
Less: Preferred Dividends | 313 | 270 | 320 | 1,173 | 1,213 | |||||||||||
Adjusted Net Income to Common Shareholders | $3,906 | $4,352 | $3,381 | $16,778 | $14,583 | |||||||||||
Reported EPS | $1.64 | $1.73 | $(7.38) | $6.68 | $(2.98) | |||||||||||
Impact of: | ||||||||||||||||
Tax Reform | 0.03 | - | (8.66) | 0.03 | (8.31) | |||||||||||
Adjusted EPS | $1.61 | $1.73 | $1.28 | $6.65 | $5.33 | |||||||||||
Common Share Repurchases | 14,545 | |||||||||||||||
Common Dividends | 3,865 | |||||||||||||||
Total Capital Returned to Common Shareholders | $18,410 | |||||||||||||||
Adjusted Payout Ratio | 110% | |||||||||||||||
Reported EOP TCE | $151,078 | |||||||||||||||
Impact of: | ||||||||||||||||
Tax Reform | 94 | |||||||||||||||
Adjusted EOP TCE | $150,984 | |||||||||||||||
Adjusted Average TCE | $153,324 | |||||||||||||||
Adjusted RoTCE | 10.9% | |||||||||||||||
Note: Totals may not sum due to rounding. | ||||||||||||||||
Global Consumer Banking | 4Q'18 | 3Q'18 | 4Q'17 | 2018 | 2017 | |||||||||||
($ in millions) | ||||||||||||||||
Reported Net Income | $1,519 | $1,566 | $580 | $5,755 | $3,869 | |||||||||||
Impact of: | ||||||||||||||||
Tax Reform | - | - | (750) | - | (750) | |||||||||||
Adjusted Net Income | $1,519 | $1,566 | $1,330 | $5,755 | $4,619 | |||||||||||
Impact of FX Translation | - | (23) | (19) | - | (28) | |||||||||||
Adjusted Net Income in Constant Dollars | $1,519 | $1,543 | $1,311 | $5,755 | $4,591 | |||||||||||
Note: Totals may not sum due to rounding. | ||||||||||||||||
Institutional Clients Group | 4Q'18 | 3Q'18 | 4Q'17 | 2018 | 2017 | |||||||||||
($ in millions) | ||||||||||||||||
Reported Net Income | $2,521 | $3,123 | $203 | $12,183 | $9,009 | |||||||||||
Impact of: | ||||||||||||||||
Tax Reform | - | - | (2,000) | - | (2,000) | |||||||||||
Adjusted Net Income | $2,521 | $3,123 | $2,203 | $12,183 | $11,009 | |||||||||||
Note: Totals may not sum due to rounding. | ||||||||||||||||
Corp / Other | 4Q'18 | 3Q'18 | 4Q'17 | 2018 | 2017 | |||||||||||
($ in millions) | ||||||||||||||||
Reported Net Income (Loss) | $273 | $(67) | $(19,676) | $107 | $(19,676) | |||||||||||
Impact of: | ||||||||||||||||
Tax Reform | 94 | - | (19,844) | 94 | (19,844) | |||||||||||
Adjusted Net Income (Loss) | $179 | $(67) | $168 | $13 | $168 | |||||||||||
Appendix B | |||||||
Citigroup | 4Q'18 | 4Q'17 | |||||
(Revenues in $ millions; balance sheet items in $ billions) | |||||||
Reported Revenues | $17,124 | $17,504 | |||||
Impact of FX Translation | - | (418) | |||||
Revenues in Constant Dollars | $17,124 | $17,086 | |||||
Reported EOP Loans | $684 | $667 | |||||
Impact of FX Translation | - | (9) | |||||
EOP Loans in Constant Dollars | $684 | $658 | |||||
Reported EOP Deposits | $1,013 | $960 | |||||
Impact of FX Translation | - | (15) | |||||
EOP Deposits in Constant Dollars | $1,013 | $945 | |||||
Note: Totals may not sum due to rounding. | |||||||
Global Consumer Banking | 4Q'18 | 4Q'17 | |||||
($ in millions) | |||||||
Reported Revenues | $8,440 | $8,449 | |||||
Impact of FX Translation | - | (126) | |||||
Revenues in Constant Dollars | $8,440 | $8,323 | |||||
Reported Expenses | $4,593 | $4,563 | |||||
Impact of FX Translation | - | (72) | |||||
Expenses in Constant Dollars | $4,593 | $4,491 | |||||
Reported Credit Costs | $1,843 | $1,851 | |||||
Impact of FX Translation | - | (23) | |||||
Credit Costs in Constant Dollars | $1,843 | $1,828 | |||||
Note: Totals may not sum due to rounding. | |||||||
Latin America Consumer Banking | 4Q'18 | 4Q'17 | |||||
($ in millions) | |||||||
Reported Revenues | $1,362 | $1,359 | |||||
Impact of FX Translation | - | (63) | |||||
Revenues in Constant Dollars | $1,362 | $1,296 | |||||
Reported Retail Banking Revenues | $965 | $971 | |||||
Impact of FX Translation | - | (44) | |||||
Retail Banking Revenues in Constant Dollars | $965 | $927 | |||||
Reported Branded Cards Revenues | $397 | $388 | |||||
Impact of FX Translation | - | (19) | |||||
Branded Cards Revenues in Constant Dollars | $397 | $369 | |||||
Note: Totals may not sum due to rounding. | |||||||
Asia Consumer Banking(1) | 4Q'18 | 4Q'17 | |||||
($ in millions) | |||||||
Reported Revenues | $1,824 | $1,908 | |||||
Impact of FX Translation | - | (63) | |||||
Revenues in Constant Dollars | $1,824 | $1,845 | |||||
Reported Retail Banking Revenues | $1,092 | $1,138 | |||||
Impact of FX Translation | - | (34) | |||||
Retail Banking Revenues in Constant Dollars | $1,092 | $1,104 | |||||
Reported Branded Cards Revenues | $732 | $770 | |||||
Impact of FX Translation | - | (29) | |||||
Branded Cards Revenues in Constant Dollars | $732 | $741 | |||||
Note: Totals may not sum due to rounding. | |||||||
(1) Asia GCB includes the results of operations in EMEA GCB for all periods presented. |
|||||||
Treasury and Trade Solutions | 4Q'18 | 4Q'17 | |||||
($ in millions) | |||||||
Reported Revenues | $2,402 | $2,236 | |||||
Impact of FX Translation | - | (78) | |||||
Revenues in Constant Dollars | $2,402 | $2,158 | |||||
Note: Totals may not sum due to rounding. | |||||||
Securities Services | 4Q'18 | 4Q'17 | |||||
($ in millions) | |||||||
Reported Revenues | $653 | $612 | |||||
Impact of FX Translation | - | (29) | |||||
Revenues in Constant Dollars | $653 | $583 | |||||
Note: Totals may not sum due to rounding. |
Appendix C | ||||||||||
($ in millions) | 12/31/2018(1) | 9/30/2018 | 12/31/2017 | |||||||
Citigroup Common Stockholders' Equity(2) | $177,928 | $178,153 | $181,671 | |||||||
Add: Qualifying noncontrolling interests | 147 | 148 | 153 | |||||||
Regulatory Capital Adjustments and Deductions: | ||||||||||
Less: | ||||||||||
Accumulated net unrealized losses on cash flow hedges, net of tax(3) | (729) | (1,095) | (698) | |||||||
Cumulative unrealized net gain (loss) related to changes in fair |
||||||||||
liabilities attributable to own creditworthiness, net of tax(4) |
580 | (503) | (721) | |||||||
Intangible Assets: | ||||||||||
Goodwill, net of related deferred tax liabilities (DTLs)(5) |
21,823 | 21,891 | 22,052 | |||||||
Identifiable intangible assets other than mortgage servicing |
||||||||||
net of related DTLs |
4,313 | 4,304 | 4,401 | |||||||
Defined benefit pension plan net assets | 806 | 931 | 896 | |||||||
Deferred tax assets (DTAs) arising from net operating loss, |
||||||||||
and general business credit carry-forwards |
11,825 | 12,345 | 13,072 | |||||||
Common Equity Tier 1 Capital (CET1) | $139,457 | $140,428 | $142,822 | |||||||
Risk-Weighted Assets (RWA) | $1,170,742 | $1,196,923 | $1,155,099 | |||||||
Common Equity Tier 1 Capital Ratio (CET1 / RWA) | 11.9% | 11.7% | 12.4% |
Note: |
Citi's reportable CET1 Capital ratios were derived under the U.S. Basel III Standardized Approach framework for all periods presented. This reflects the lower of the CET1 Capital ratios under both the Standardized Approach and the Advanced Approaches under the Collins Amendment. |
||
(1) | Preliminary. | ||
(2) |
Excludes issuance costs related to outstanding preferred stock in accordance with Federal Reserve Board regulatory reporting requirements. |
||
(3) |
Common Equity Tier 1 Capital is adjusted for accumulated net unrealized gains (losses) on cash flow hedges included in accumulated other comprehensive income that relate to the hedging of items not recognized at fair value on the balance sheet. |
||
(4) |
The cumulative impact of changes in Citigroup’s own creditworthiness in valuing liabilities for which the fair value option has been elected, and own-credit valuation adjustments on derivatives, are excluded from Common Equity Tier 1 Capital, in accordance with the U.S. Basel III rules. |
||
(5) |
Includes goodwill “embedded” in the valuation of significant common stock investments in unconsolidated financial institutions. |
||
Appendix D | ||||||||||
($ in millions) | 12/31/2018(1) | 9/30/2018 | 12/31/2017 | |||||||
Common Equity Tier 1 Capital (CET1) | $139,457 | $140,428 | $142,822 | |||||||
Additional Tier 1 Capital (AT1)(2) | 18,864 | 19,449 | 19,555 | |||||||
Total Tier 1 Capital (T1C) (CET1 + AT1) | $158,321 | $159,877 | $162,377 | |||||||
Total Leverage Exposure (TLE) | $2,461,844 | $2,459,993 | $2,432,491 | |||||||
Supplementary Leverage Ratio (T1C / TLE) | 6.4% | 6.5% | 6.7% |
(1) |
Preliminary. |
||
(2) |
Additional Tier 1 Capital primarily includes qualifying noncumulative perpetual preferred stock and qualifying trust preferred securities. |
||
Appendix E | ||||||||||
($ and shares in millions, except per share amounts) | 12/31/2018(1) | 9/30/2018 | 12/31/2017 | |||||||
Common Stockholders' Equity | $177,760 | $177,969 | $181,487 | |||||||
Less: | ||||||||||
Goodwill | 22,046 | 22,187 | 22,256 | |||||||
Intangible Assets (other than MSRs) | 4,636 | 4,598 | 4,588 | |||||||
Goodwill and Identifiable Intangible Assets (other than MSRs) Related to Assets Held-for-Sale |
- | - | 32 | |||||||
Tangible Common Equity (TCE) | $151,078 | $151,184 | $154,611 | |||||||
Common Shares Outstanding (CSO) | 2,369 | 2,442 | 2,570 | |||||||
Tangible Book Value Per Share (TCE / CSO) | $63.79 | $61.91 | $60.16 |
(1) Preliminary. | |
1 Citigroup’s total expenses divided by total revenues.
2 Preliminary. Citigroup’s return on average tangible common
equity (RoTCE) is a non-GAAP financial measure. RoTCE represents
annualized net income available to common shareholders as a percentage
of average tangible common equity (TCE). Citigroup’s 2018 RoTCE of 10.9%
excludes the one-time impact of Tax Reform in 4Q’18. For the components
of the calculation, see Appendix A.
3 Ratios as of December 31, 2018 are preliminary. Citigroup’s
Common Equity Tier 1 (CET1) Capital ratio and Supplementary Leverage
Ratio (SLR) reflect full implementation of the U.S. Basel III rules for
all periods. As of December 31, 2017, these ratios are non-GAAP
financial measures, which reflect full implementation of regulatory
capital adjustments and deductions prior to the effective date of
January 1, 2018. For the composition of Citigroup’s CET1 Capital and
ratio, see Appendix C. For the composition of Citigroup’s SLR, see
Appendix D.
4 Citigroup’s payout ratio is the sum of common dividends and
common share repurchases divided by net income available to common
shareholders. Citigroup’s 2018 payout ratio of 110% excludes the
one-time impact of Tax Reform in 4Q’18. For the components of the
calculation, see Appendix A.
5 Represents the fourth quarter 2017 and full year 2017
one-time impact of the enactment of the Tax Cuts and Jobs Act (Tax
Reform), which was signed into law on December 22, 2017, as well as the
fourth quarter 2018 and full year 2018 one-time impact of the
finalization of the provisional component of the impact based on Citi’s
analysis as well as additional guidance received from the U.S. Treasury
Department related to Tax Reform. For the components of the calculation,
see Appendix A.
6 Citigroup’s tangible book value per share is a non-GAAP
financial measure. For a reconciliation of this measure to reported
results, see Appendix E.
7 Results of operations excluding the impact of foreign
exchange translation (constant dollar basis) are non-GAAP financial
measures. For a reconciliation of these measures to reported results,
see Appendices A and B.
8 Credit derivatives are used to economically hedge a portion
of the corporate loan portfolio that includes both accrual loans and
loans at fair value. Gains / (losses) on loan hedges includes the
mark-to-market on the credit derivatives and the mark-to-market on the
loans in the portfolio that are at fair value. The fixed premium costs
of these hedges are netted against the corporate lending revenues to
reflect the cost of credit protection. Citigroup’s results of operations
excluding the impact of gains / (losses) on loan hedges are non-GAAP
financial measures.
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