Citigroup (C) shares soared on Wednesday following a stellar fourth-quarter earnings report that surpassed analyst expectations. The bank reported strong performance across its various business segments, with CEO Jane Fraser attributing the success to the company’s strategic initiatives.
In a press release, Fraser expressed satisfaction with Citigroup’s performance in 2024, noting that net income had surged by nearly 40% to $12.7 billion. The company exceeded its revenue target for the year, with record-breaking results in Services, Wealth, and U.S. Personal Banking. As a result, Citigroup’s stock price surged by almost 7%.
Key financial metrics for the fourth quarter outperformed analyst consensus estimates, with earnings coming in at $1.34 per share compared to the expected $1.22, and revenue reaching $19.58 billion versus the anticipated $19.49 billion.
Citigroup reported a net income of $2.86 billion, a significant improvement from the net loss of $1.84 billion recorded in the same period a year ago. The bank’s revenue also saw a robust 12% year-over-year increase.
Looking ahead, Citigroup projected a return on tangible common equity between 10% and 11% in 2026, slightly below its previous medium-term goal of 11% to 12%. CEO Jane Fraser emphasized that this level is a stepping stone rather than a final target, with plans to enhance returns through ongoing internal investments.
To further enhance shareholder value, Citigroup announced a $20 billion stock buyback program. CFO Mark Mason indicated that approximately $1.5 billion of the buyback is expected to occur in the first quarter of the year.
The bank witnessed growth across various business units in the fourth quarter, with investment banking standing out as a key driver. Revenue in this segment surged by 35% year over year, fueled by strong performance in the issuance of investment-grade corporate debt. Total banking revenue grew by 12%, expanding to 27% when factoring in loan hedges.
Markets revenue also saw a substantial increase, rising by 36% to $4.58 billion, driven by growth in both fixed income and equity businesses. Wealth and services units reported revenue growth of 20% and 15% respectively year over year.
Citigroup’s cost of credit for the quarter totaled $2.59 billion, down from $3.55 billion in the same period last year. The bank added a net $203 million to its allowance for credit losses, reflecting improved credit quality.
During the conference call with analysts, questions centered on Citigroup’s expenses and turnaround progress. The company anticipates a slight decrease in expenses in 2025, which will include approximately $600 million related to company restructuring efforts.
CEO Jane Fraser also mentioned that the planned IPO of Banamex, Bank of America’s Mexico retail business, might be delayed until 2026.
In 2024, Citigroup’s stock performed strongly, recording a 37% increase for the year. The stock continued to climb in the current year, rising over 4% as of Wednesday.
Overall, Citigroup’s impressive financial results and strategic outlook position the bank for continued growth and value creation for its shareholders.
