• January 16, 2018
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Citigroup releases 2017 Q4 results

Citigroup Inc. reported a net loss for the fourth quarter 2017 of $18.3 billion, or $7.15 per diluted share, on revenues of $17.3 billion. This compared to net income of $3.6 billion, or $1.14 per diluted share, on revenues of $17.0 billion for the fourth quarter 2016. The net loss of $18.3 billion, or $7.15 per share, included an estimated one-time, noncash charge of $22 billion, or $8.43 per share, recorded in the tax line within Corporate / Other, related to the enactment of the Tax Cuts and Jobs Act (Tax Reform)7. This charge is comprised of $19 billion related to the re-measurement of Citi’s deferred tax assets (DTA) arising from a lower U.S. corporate tax rate and shift to a territorial tax regime, and $3 billion related to the deemed repatriation of unremitted earnings of foreign subsidiaries. Excluding the impact of Tax Reform, net income of $3.7 billion increased 4% from the prior year period. Earnings per share increased 12% to $1.28, driven by the higher net income and a 7% reduction in average diluted shares outstanding. These results include a combined net benefit of roughly $0.08 per share, recorded in Corporate / Other, related to discrete items that resulted in a lower-thanexpected tax rate, as well as a one-time loss in discontinued operations.

For the full year 2017, Citigroup reported a net loss of $6.2 billion on revenues of $71.4 billion, compared to net income of $14.9 billion on revenues of $69.9 billion for the full year 2016. Excluding the impact of Tax Reform, Citigroup net income of $15.8 billion increased 6% compared to the prior year. Throughout the remainder of this press release, Citigroup and Corporate / Other’s net income and Citigroup’s effective tax rate are presented on a reported and adjusted basis, excluding the impact of Tax Reform. For additional information on this adjustment as well as other non-GAAP financial measures used in this release, see the Appendices and Footnotes to this release. Percentage comparisons are calculated for the fourth quarter 2017 versus the fourth quarter 2016, unless otherwise specified.

Citigroup revenues of $17.3 billion in the fourth quarter 2017 increased 1%, driven by 2% aggregate growth in Global Consumer Banking (GCB) and Institutional Clients Group (ICG), partially offset by a 13% decrease in Corporate / Other, primarily due to the continued wind-down of legacy assets.

Citigroup’s operating expenses remained largely unchanged at $10.1 billion in the fourth quarter 2017, as higher volume-related expenses and ongoing investments were offset by efficiency savings and the wind-down of legacy assets.

Citigroup’s cost of credit in the fourth quarter 2017 was $2.1 billion, a 16% increase, driven by an increase in net credit losses of $184 million, primarily due to volume growth and seasoning in cards and an episodic charge-off in ICG, as well as a higher loan loss reserve build.

Citigroup’s net loss of $18.3 billion in the fourth quarter 2017, compared to net income of $3.6 billion in the prior year period, primarily reflected the impact of Tax Reform. Excluding the impact of Tax Reform, Citigroup’s net income increased to $3.7 billion, as the higher revenues and the lower tax rate more than offset the higher cost of credit and the one-time loss in discontinued operations. Including the impact of Tax Reform, Citigroup’s effective tax rate in the fourth quarter 2017 was not meaningful. Excluding the impact of Tax Reform, Citigroup’s effective tax rate in the fourth quarter 2017 was 24.9% compared to 29.6% in the fourth quarter 2016.
Citigroup’s allowance for loan losses was $12.4 billion at quarter end, or 1.87% of total loans, compared to $12.1 billion, or 1.94% of total loans, at the end of the prior year period. Total non-accrual assets declined 17% from the prior year period to $4.8 billion. Consumer non-accrual loans declined 15% to $2.7 billion and corporate non-accrual loans decreased 20% to $1.9 billion.

Citigroup’s end of period loans were $667 billion as of quarter end, up 7% from the prior year period. Excluding the impact of foreign exchange translation9, Citigroup’s end of period loans grew 5%, as 7% aggregate growth in ICG and GCB was partially offset by the continued wind down of legacy assets in Corporate / Other.

Citigroup’s end of period deposits were $960 billion as of quarter end, up 3%. In constant dollars, Citigroup deposits were up 1%, as a 2% increase in ICG was slightly offset by a decline in Corporate / Other, and GCB remained largely unchanged.

Citigroup’s book value per share was $70.85 and tangible book value per share was $60.40, each at quarter end, representing 5% and 6% decreases, respectively, primarily reflecting the estimated impact of Tax Reform. At quarter end, Citigroup’s Common Equity Tier 1 (CET1) Capital ratio was 12.3%, down from 13.0% sequentially, driven primarily by the return of capital to common shareholders and the impact of Tax Reform (a reduction of approximately $6 billion of CET1 Capital or 40 bps to the CET1 Capital ratio).

Citigroup’s Supplementary Leverage Ratio for the fourth quarter 2017 was 6.7%, down from 7.1% sequentially, driven by a decrease in Tier 1 Capital as well as an increase in Total Leverage Exposure. During the fourth quarter 2017, Citigroup repurchased 74 million common shares and returned a total of $6.3 billion to common shareholders in the form of common share repurchases and dividends.

Re-disseminated by The Asian Banker