Citigroup’s profits dropped more than one-fifth in the fourth quarter, as higher revenues from fixed income trading and its corporate treasury services business failed to pick up the slack from a drop-off in investment banking.
Citi said net income for the final three months of 2022 was $2.5bn, or $1.16 a share, in line with analysts’ estimates, but down almost 22 per cent from $3.2bn in the same period last year.
Overall revenues in the fourth quarter reached $18bn, in line with analyst estimates. Citi’s net interest income — the difference between what banks pay on deposits and what they earn from loans and other assets — was almost $13.3bn, up 23 per cent from a year ago, helped by the Federal Reserve’s aggressive campaign to raise interest rates.
Revenues at Citi’s services division, which house the Treasury and Trade Solutions business that Fraser describes as the bank’s “crown jewel”, reported revenues of $4.3bn, up 32 per cent and ahead of estimates for $4.1bn.
In the fourth quarter, investment banking revenues were down 58 per cent at $645mn, compared with analysts’ estimates for $722mn. Like all Wall Street banks, Citi’s investment banking revenue has suffered this year from a prolonged slowdown in dealmaking activity.
Revenues in Citi’s trading division, which has benefited from increased activity during recent market volatility, were up 18 per cent to $3.9bn. Analysts had forecast revenue to reach $3.7bn. The gains were driven by a 31 per cent increase in revenues from its fixed income operations.
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