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Citigroup reports surprise drop in quarterly revenue, shares slip

Reuters 

(Reuters) - Inc reported a surprise drop on Monday in quarterly revenue due to a steep decline in its fixed income trading business, hurt by volatility in financial markets at the end of the year.

Shares of the company fell nearly 1.6 percent to $55.80 in early trading.

"A volatile fourth quarter impacted some of our market sensitive businesses, particularly fixed income," said in a statement.

Fixed income revenue fell 21 percent in the quarter due to widening credit spreads. The squeeze on revenue caused Citi to narrowly miss its efficiency target for the year, despite a 4 percent decline in expenses.

The ended the year with an of 57.4 percent, just shy of its 57.3 percent goal. A lower means a is better at managing its overhead expenses as a percentage of revenue.

Despite missing its efficiency goals, Citi exceeded its target for returns on tangible common equity (ROTCE), a widely watched measure of how well banks use shareholder money. Citi reported a 2018 ROTCE of 10.9 percent, topping its goal of 10.5 percent.

Citi is the first of the to report fourth-quarter results. Wall Street majors JPMorgan Chase & Co, of America Corp and will report later this week.

Citi's results, however, may not be a good bellwether for most U.S. banks as it gets roughly half of its revenue from outside the

Excluding a one-time tax related gain, quarterly profit rose to $4.22 billion, or $1.61 a share, in the quarter ended Dec. 31, from $3.70 billion, or $1.28 a share, a year earlier.

Revenue fell 2 percent to $17.12 billion. Analysts were expecting a 1.7 percent rise in revenue to $17.55 billion and a profit of $1.55 per share, according to IBES data from Refinitiv.

(Reporting by in New York and Siddharth Cavale in Bengaluru; Editing by Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 14 2019. 18:54 IST
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