Citigroup (C) Q4 2023 earnings summary

Executive summary

• FY23 revenue was $78.5B, up 4% YoY; net income was $9.2B, down 38%, and diluted EPS was $4.04, down 42%.

• Q4 revenue was $17.4B, down 3% YoY; a $1.8B net loss, or $(1.16) diluted EPS, reflected notable items and higher credit costs.

• Excluding Q4 notable items, diluted EPS was $0.84; underlying revenue rose 2% excluding divestiture impacts and Argentina peso devaluation.

• Strategy centered on transformation, simplification and growth across five interconnected businesses, with a redesigned structure removing management layers.

Financial highlights

• Q4 net interest income was $13.8B and non-interest revenue was $3.6B; FY figures were $54.9B and $23.6B, respectively.

• Q4 expenses rose 23% YoY to $16.0B; excluding the FDIC assessment and divestiture costs, expenses were $14.2B, up 10%, largely due to restructuring.

• Q4 cost of credit was $3.5B versus $1.8B a year earlier, reflecting transfer-risk reserves, card losses and ACL builds for new card volumes.

• FY23 expenses were $56.4B reported and $54.3B excluding divestitures and the FDIC assessment; adjusted expenses were in line with guidance.

• Q4 notable items reduced EPS by $2.00; excluding these items, EPS was $0.84 and ROTCE was 4.1%, versus reported ROTCE of (5.1)%.

Outlook and guidance

• FY24 revenue guidance was $80–81B; NII excluding Markets was expected to decline modestly YoY amid anticipated lower global rates.

• FY24 expense guidance was $53.5–53.8B, including $0.7–1.0B in severance and simplification costs; medium-term reported headcount reduction target was 20K.

• FY24 average net credit loss guidance: Branded Cards 3.50–4.00% and Retail Services 5.75–6.25%; mid-single-digit loan growth expected in both portfolios.

• Medium-term targets included 4–5% revenue CAGR, 6–7% loan growth, cost of credit at 1% of loans and ROTCE of 11–12%; expense target was $51–53B, subject to revenue growth.