Citigroup, grappling with its most challenging quarter in 15 years, has announced plans to streamline its workforce by 20,000 jobs in the “medium term” as part of an ongoing restructuring initiative.
This announcement coincides with a significant $1.8 billion quarterly loss, attributed to costs associated with the bank’s reorganization, its withdrawal from Russia, and the devaluation of Argentina’s peso. The bank anticipates over $4 billion in charges and expenses for the quarter, including an $800 million component linked to its substantial overhaul, a $1.7 billion “special assessment” from the Federal Deposit Insurance Corporation related to regional bank failures last year, losses tied to the devaluation of the Argentine currency, and over $500 million in expenses associated with winding down operations in Russia.
Even excluding these one-off charges and expenses, quarterly earnings experienced a more than 20% decline from the fourth quarter of 2022, amounting to over $1.5 billion, though this performance surpassed analysts’ expectations.
Key Highlights:
- Quarterly revenues declined by 3% to $17.4 billion.
- Full-year earnings for Citi dropped by 38% compared to the previous year, totaling $9.2 billion.
- The bank continued to benefit from the resilient U.S. economy, with credit card spending boosting revenue in the consumer banking division by 12%.
- Corporate spending contributed to a 6% increase in revenue in Citi’s treasury services division, responsible for managing cash and processing payments for multinationals.
- The investment banking division reported strong performance, with fees increasing by more than a fifth to almost $1 billion, marking the business’s best result in over two years.
- Revenues from corporate lending, however, experienced a 26% drop as higher interest rates impacted demand for borrowing.
- Reduced market volatility at the end of the year negatively affected the bank’s traders, with revenue from the sales and trading of bonds, commodities, and currencies plunging by 25%.
