NEW YORK -- Citigroup said Friday that its profits jumped sharply in the fourth quarter, helped by lower legal and regulatory costs that hammered the bank in the fourth quarter of 2014.
The New York-based financial conglomerate had a profit of $3.34 billion in the three-month period ending in December, or $1.02 per share. That's compared with a profit of $344 million, or 6 cents per share a year earlier. The 2014 quarter was where Citigroup incurred roughly $3.5 billion in legal costs tied to settling several high-profile investigations, including allegations of currency trading and interest rate manipulation.
Citi has continued its theme of trying to clean up its balance sheet and slim itself down in the eight years since the financial crisis. Citi Holdings, the so-called bad bank where Citi warehoused most of its toxic assets from that period, was profitable in the quarter once again. Citi was able to sell $32 billion in assets from Citi Holdings last quarter.
"We have sharpened our focus on target clients, shedding over 20 consumer and institutional businesses" in recent years, Citi Chief Executive Officer Michael Corbat said in a statement. "We have undoubtedly become a simpler, smaller, safer and stronger institution."
Citigroup's global consumer banking division, which includes Citibank in the U.S. as well as its operations in Latin America and Asia, saw a 20 percent drop in profits from a year ago to $1.34 billion. Most of the drop was tied to Latin America, where Citi has been dealing with issues tied to its Mexico subsidiary Banamex and has been closing operations in some Latin American countries.
Citi's investment banking division performed well in the fourth quarter, even with the choppy U.S. and overseas markets. Bond trading had revenues of $2.2 billion in the quarter, up 7 percent, and stock trading had revenues of $606 million, up 29 percent. Investment banking fees, earned as Citi helps companies issue debt, go public or merge with another company, rose 6 percent to $1.1 billion.
Removing an adjustment tied to the value of Citigroup's debt, Citi earned $3.45 billion, or $1.06 per share. Analysts were looking for Citi to earn $1.05 per share, according to FactSet.
Citi's total revenue was $18.46 billion, compared with $17.90 billion the year before. Citi's expenses dropped 23 percent, most of that tied to lower legal expenses.
Citigroup shares fell $2.91, or 6.4 percent, to close Friday at $42.47, amid a broad market downturn.
Wells Fargo & Co., which just surpassed Citigroup as the third-largest U.S. bank by assets, also posted fourth-quarter profit that beat estimates, though lending margins and revenue missed some analysts' expectations.
Information for this article was contributed by Ken Sweet of The Associated Press and Dakin Campbell of Bloomberg News.
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Business on 01/16/2016