Citigroup (C 78.83, +1.99) has spiked 2.6% in pre-market after beating earnings expectations.
The banking heavyweight reported above-consensus adjusted fourth quarter earnings of $1.28 per share on a 1.4% year-over-year increase in revenue to $17.25 billion, which was just ahead of expectations.
The passage of the Tax Cuts and Jobs Act prompted the company to take a one-time non-cash charge of $22 billion or $8.43 per share. Citi's CEO Michael Corbat said that the impact of the charge on regulatory capital was much less significant and the change in policy has not altered the company's capital return goals.
Efficiency Ratio ended the year at 57.7%, up 150 basis points year-over-year. Common Equity Tier 1 Capital Ratio declined to 12.3% from 13.0% one year ago.
Citi's Global Consumer Banking Segment generated revenue of $8.41 billion, which was up 5.6% year-over-year. Net Credit Losses rose 8.2% to $1.64 billion while Credit Reserve increased 8.7% to $175 million. Segment net income rose 9.1% to $1.34 billion.
Institutional Clients Group revenue declined 1.1% to $8.08 billion. Fixed Income Markets revenue fell 18.4% to $2.41 billion and Equity Markets revenue declined 22.6% to $530 million, offsetting gains in all other categories. Segment net income declined 7.0% to $2.20 billion due to higher cost of credit, lower revenues, and higher expenses.
Corporate/Other revenue fell 13.4% to $746 million due to the wind down of legacy assets. The segment recorded a net loss of $21.80 billion due to the impact of tax reform.