Citigroup’s profit falls on provision hike, dealmaking slowdown

CITIGROUP reported a decline in fourth-quarter profit on Friday (Jan 13) as it hiked provisions to prepare for a worsening economy, and investment-banking revenue fell on a sharp drop in dealmaking activity.

Shares of Citi slipped nearly 3 per cent in pre-market trading. This came after fears of a potential recession prompted the bank to add US$640 million to its reserves in the fourth quarter. In 2021, when pandemic-related loan losses failed to materialise, it released US$1.4 billion from its reserves.

Citi’s investment-banking revenue plunged 58 per cent, after merger and acquisition activity slowed dramatically in 2022. Companies shunned deals last year, amid higher interest rates, the war in Ukraine, and growing economic uncertainties.

However, Citi’s markets business was boosted as traders took to portfolio repositioning in the face of elevated volatility. Revenue at the bank jumped 6 per cent to US$18 billion.

Net profit came in at US$2.5 billion, or US$1.16 per share, for the three months ended Dec 31, 2022. This was down from the previous year’s revenue of US$3.2 billion, or US$1.46 per share. REUTERS