For Immediate Release
Citigroup Inc. (NYSE: C)
January 13, 2023
FOURTH QUARTER AND FULL YEAR 2022 RESULTS AND KEY METRICS
4Q | 4Q ROE | CET1 | ||
4Q | 4Q | |||
5.0% | Capital | |||
Revenues | Net Income | EPS | ||
4Q RoTCE | Ratio | |||
$18.0B | $2.5B | $1.16 | ||
(1) | 13.0%(2) | |||
5.8% | ||||
2022 | 2022 ROE | |||
2022 | 2022 | 7.7% | SLR | |
Revenues | Net Income | EPS | ||
2022 RoTCE | 5.8%(2) | |||
$75.3B | $14.8B | $7.00 | ||
8.9%(1) | ||||
RETURNED $1.0 BILLION IN DIVIDENDS TO COMMON SHAREHOLDERS
PAYOUT RATIO OF 44%(3)
BOOK VALUE PER SHARE OF $94.06
TANGIBLE BOOK VALUE PER SHARE OF $81.65(4)
New York, January 13, 2023 - Citigroup Inc. today reported net income for the fourth quarter 2022 of $2.5 billion, or $1.16 per diluted share, on revenues of $18.0 billion. This compares to net income of $3.2 billion, or $1.46 per diluted share, on revenues of $17.0 billion for the fourth quarter 2021.
Fourth quarter results included divestiture-related impacts of approximately $192 million in earnings before taxes (approximately $113 million after-tax), primarily driven by a gain on the sale of the Thailand consumer business. Excluding these divestiture-related impacts, earnings per share was $1.10(5). This compares to divestiture-related impacts in the fourth quarter 2021 of approximately $1.2 billion in earnings before taxes (approximately $1.1 billion after-tax), primarily driven by costs related to the Korea voluntary early retirement program (VERP)(5).
Revenues increased 6% from the prior-year period and 5% excluding the divestiture- related impacts(5), as growth in net interest income was partially offset by lower non- interest revenues. The higher net interest income was driven by the impact of higher interest rates across businesses and strong loan growth in Personal Banking and Wealth Management (PBWM). The lower non-interest revenues reflected declines in Investment Banking in Institutional Clients Group (ICG) and lower investment product revenues in Global Wealth Management in PBWM.
Net income of $2.5 billion decreased 21% from the prior-year period, and decreased 43% excluding the divestiture-related impacts, primarily driven by higher cost of credit, largely resulting from the loan growth in PBWM and deterioration in macroeconomic assumptions, partially offset by the higher revenues and lower expenses.
CEO COMMENTARY
Citi CEO Jane Fraser said, "One of our major goals in 2022 was to put in place a strategic plan designed to create long-term value for our shareholders and I am pleased with the significant progress we have already made in terms of our Transformation, simplification and strengthening our five interconnected businesses, some of which delivered excellent results this quarter.
"With their revenues up 32%, Services delivered another excellent quarter, and we have gained significant share in both Treasury and Trade Solutions and Securities Services. Markets had the best fourth quarter in recent memory, driven by a 31% increase in Fixed Income, while Banking and Wealth Management were impacted by the same market conditions they faced throughout the year. Our cards businesses had double-digit revenue growth for the second straight quarter, and we continue to make progress on our international consumer exits, closing five sales to date.
"Over the course of 2022, we returned over $7 billion to our shareholders. We ended the year with a CET1 capital ratio of 13% and a tangible book value per share of $81.65. We intentionally designed a strategy that can deliver for our shareholders in different environments, and we are very much on track to reach the medium-term return targets we shared on Investor Day," Ms. Fraser concluded.
1
Earnings per share of $1.16 decreased 21% from the prior-year period, reflecting the lower net income, partially offset by an approximate 2% decline in average diluted shares outstanding.
For the full year 2022, Citigroup reported net income of $14.8 billion on revenues of $75.3 billion, compared to net income of $22.0 billion on revenues of $71.9 billion for the full year 2021.
Percentage comparisons throughout this press release are calculated for the fourth quarter 2022 versus the fourth quarter 2021, unless otherwise specified.
Fourth Quarter Financial Results
Citigroup | 4Q'22 | 3Q'22 | 4Q'21 | QoQ% | YoY% | 2022 | 2021 | % r | ||||||
($ in millions, except per share amounts and as otherwise noted) | ||||||||||||||
Institutional Clients Group | $9,159 | $9,468 | $8,908 | (3)% | 3% | 41,206 | 39,836 | 3% | ||||||
Personal Banking and Wealth Management | 6,096 | 6,187 | 5,785 | (1)% | 5% | 24,217 | 23,327 | 4% | ||||||
Legacy Franchises | 2,052 | 2,554 | 2,193 | (20)% | (6)% | 8,472 | 8,251 | 3% | ||||||
Corporate / Other | 699 | 299 | 131 | NM | NM | 1,443 | 470 | NM | ||||||
Total revenues, net of interest expense | 18,006 | 18,508 | 17,017 | (3)% | 6% | $75,338 | $71,884 | 5% | ||||||
Total operating expenses | 12,985 | 12,749 | 13,532 | 2% | (4)% | $51,292 | $48,193 | 6% | ||||||
Net credit losses | 1,180 | 887 | 866 | 33% | 36% | 3,789 | 4,895 | (23)% | ||||||
Net ACL build / (release) | (a) | 640 | 370 | (1,369) | 73% | NM | 1,247 | (8,786) | NM | |||||
Other provisions | (b) | 25 | 108 | 38 | (77)% | (34)% | 203 | 113 | 80% | |||||
Total cost of credit | 1,845 | 1,365 | (465) | 35% | NM | $5,239 | $(3,778) | NM | ||||||
Income from continuing operations before income taxes | 3,176 | 4,394 | 3,950 | (28)% | (20)% | $18,807 | $27,469 | (32)% | ||||||
Provision for income taxes | 640 | 879 | 771 | (27)% | (17)% | 3,642 | 5,451 | (33)% | ||||||
Income from continuing operations | 2,536 | 3,515 | 3,179 | (28)% | (20)% | $15,165 | $22,018 | (31)% | ||||||
Income (loss) from discontinued operations, net of taxes | (2) | (6) | - | 67% | NM | (231) | 7 | NM | ||||||
Net income attributable to non-controlling interest | 21 | 30 | 6 | (30)% | NM | 89 | 73 | 22% | ||||||
Citigroup's net income | $2,513 | $3,479 | $3,173 | (28)% | (21)% | $14,845 | $21,952 | (32)% | ||||||
Income (loss) from continuing operations, net of taxes | ||||||||||||||
Institutional Clients Group | 1,916 | 2,186 | 2,330 | (12)% | (18)% | 10,738 | 14,308 | (25)% | ||||||
Personal Banking and Wealth Management | 114 | 792 | 1,613 | (86)% | (93)% | 3,319 | 7,734 | (57)% | ||||||
Legacy Franchises | 75 | 316 | (620) | (76)% | NM | (9) | (9) | - | ||||||
Corporate / Other | 431 | 221 | (144) | 95% | NM | 1,117 | (15) | NM | ||||||
EOP loans ($B) | 657 | 646 | 668 | 2% | (2)% | - | - | - | ||||||
EOP assets ($B) | 2,417 | 2,381 | 2,291 | 1% | 5% | - | - | - | ||||||
EOP deposits ($B) | 1,366 | 1,306 | 1,317 | 5% | 4% | - | - | - | ||||||
Book value per share | $94.06 | $92.71 | $92.21 | 1% | 2% | $94.06 | $92.21 | 2% | ||||||
Tangible book value per share | (4) | $81.65 | $80.34 | $79.16 | 2% | 3% | $81.65 | $79.16 | 3% | |||||
Common Equity Tier 1 (CET1) Capital ratio | (2) | 13.0% | 12.3% | 12.2% | 13.0% | 12.2% | ||||||||
Supplementary Leverage ratio (SLR) | (2) | 5.8% | 5.7% | 5.7% | 5.8% | 5.7% | ||||||||
Return on average common equity | 5.0% | 7.1% | 6.4% | 7.7% | 11.5% | |||||||||
Return on average tangible common equity (RoTCE) | (1) | 5.8% | 8.2% | 7.4% | 8.9% | 13.4% | ||||||||
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information. |
- Includes credit reserve build / (release) for loans and provision for credit losses on unfunded lending commitments.
- Includes provisions for policyholder benefits and claims, HTM debt securities and other assets.
Citigroup
Citigroup revenues of $18.0 billion in the fourth quarter 2022 increased 6%. Excluding the divestiture-related impacts, primarily driven by the gain on the sale of the Thailand consumer business in the current quarter, revenues were up 5%, as the impacts of higher interest rates across businesses and the strong loan growth in US Personal Banking were partially offset by the decline in Investment Banking and the lower investment product revenues in Global Wealth Management as well as impacts from the closed exit markets.
Citigroup operating expenses of $13.0 billion in the fourth quarter 2022 decreased 4%, primarily driven by the absence of divestiture-related costs related to the Korea VERP in the prior-year period. Operating expenses included approximately $58 million of divestiture-related costs in the current quarter, compared to approximately $1.2 billion in the prior-year period. Excluding these costs in both periods, expenses increased 5%, largely driven by transformation investments, business-led investments, and volume-related expenses, partially offset by the benefit of productivity savings and expense reduction of the market exits.
2
Citigroup cost of credit was approximately $1.8 billion in the fourth quarter 2022, compared to $(0.5) billion in the prior-year period, reflecting a net build in the allowance for credit losses (ACL) for loans and unfunded commitments of $640 million, primarily due to the loan growth in PBWM and the deterioration in macroeconomic assumptions, compared to a net ACL release of $(1.4) billion in the prior-year period. The higher cost of credit also reflected higher net credit losses, primarily driven by ongoing normalization in cards, particularly in Retail Services.
Citigroup net income of $2.5 billion in the fourth quarter 2022 decreased 21% from the prior-year period, primarily driven by the higher cost of credit, partially offset by the higher revenues and lower expenses. Citigroup's effective tax rate was 20.2% in the current quarter versus 19.5% in the fourth quarter 2021.
Citigroup's total allowance for credit losses on loans was approximately $17.0 billion at quarter end, with a reserve-to-fundedloans ratio of 2.60%, compared to $16.5 billion, or 2.49% of funded loans, at the end of the prior-yearperiod. Total non-accrualloans decreased 28% from the prior-yearperiod to $2.4 billion. Consumer non-accrualloans decreased 28% to $1.3 billion and corporate non-accrualloans decreased 28% to $1.1 billion.
Citigroup's end-of-periodloans were $657 billion at quarter end, down 2% versus the prior-year period, as the decline in Legacy Franchises more than offset growth in US Personal Banking and the impact of foreign exchange translation.
Citigroup's end-of-perioddeposits were $1.4 trillion at quarter end, an increase of 4% versus the prior-year period, largely driven by deposit growth in Treasury and Trade Solutions (TTS), partially offset by lower deposits in Legacy Franchises and the impact of foreign exchange translation.
Citigroup's book value per share of $94.06 and tangible book value per share of $81.65 at quarter end increased 2% and 3%, respectively, largely driven by the net income and the lower shares outstanding, partially offset by adverse movements in the accumulated other comprehensive income (AOCI) component of equity and payment of common dividends. At quarter end, Citigroup's CET1 capital ratio was 13.0% versus 12.3% in the prior quarter, largely reflecting the benefits of net income, closing of exit markets, and the optimization of risk-weighted assets (RWA). Citigroup's Supplementary Leverage ratio for the fourth quarter 2022 was 5.8% versus 5.7% in the prior quarter. During the quarter, Citigroup returned a total of $1 billion to common shareholders in the form of dividends.
Institutional Clients Group | 4Q'22 | 3Q'22 | 4Q'21 | QoQ% | YoY% | 2022 | 2021 | % | r | ||||||||
($ in millions, except as otherwise noted) | |||||||||||||||||
Securities Services | $1,040 | $968 | $855 | 7% | 22% | 3,859 | 3,367 | 15% | |||||||||
Treasury and Trade Solutions | 3,290 | 3,209 | 2,415 | 3% | 36% | 12,163 | 9,215 | 32% | |||||||||
Total Services revenues | 4,330 | 4,177 | 3,270 | 4% | 32% | 16,022 | 12,582 | 27% | |||||||||
Fixed Income Markets | 3,155 | 3,062 | 2,414 | 3% | 31% | 14,555 | 12,880 | 13% | |||||||||
Equity Markets | 789 | 1,006 | 918 | (22)% | (14)% | 4,558 | 4,996 | (9)% | |||||||||
Total Markets revenues | 3,944 | 4,068 | 3,332 | (3)% | 18% | 19,113 | 17,876 | 7% | |||||||||
Investment Banking | 645 | 631 | 1,553 | 2% | (58)% | 3,109 | 6,631 | (53)% | |||||||||
Corporate Lending(a) | 540 | 648 | 732 | (17)% | (26)% | 2,655 | 2,887 | (8)% | |||||||||
Total Banking revenues(a) | 1,185 | 1,279 | 2,285 | (7)% | (48)% | 5,764 | 9,518 | (39)% | |||||||||
Product revenues, net of interest expense(a) | 9,459 | 9,524 | 8,887 | (1)% | 6% | $40,899 | $39,976 | 2% | |||||||||
Gain / (loss) on loan hedges | (300) | (56) | 21 | NM | NM | 307 | (140) | NM | |||||||||
Total revenues, net of interest expense | 9,159 | 9,468 | 8,908 | (3)% | 3% | $41,206 | $39,836 | 3% | |||||||||
Total operating expenses | 6,601 | 6,541 | 6,225 | 1% | 6% | $26,299 | $23,949 | 10% | |||||||||
Net credit losses | 104 | - | 82 | NM | 27% | 152 | 356 | (57)% | |||||||||
Net ACL build / (release)(b) | (54) | 16 | (373) | NM | 86% | 665 | (2,846) | NM | |||||||||
Other provisions(c) | 6 | 70 | 10 | (91)% | (40)% | 94 | - | NM | |||||||||
Total cost of credit | 56 | 86 | (281) | (35)% | NM | $911 | $(2,490) | NM | |||||||||
Net income | $1,896 | $2,162 | $2,320 | (12)% | (18)% | $10,659 | $14,225 | (25)% | |||||||||
Services Key Drivers | |||||||||||||||||
Cross border transaction value ($B) | 81 | 76 | 78 | 7% | 4% | 312 | 280 | 11% | |||||||||
Commercial card spend volume ($B) | 15 | 16 | 11 | (1)% | 35% | 57 | 39 | 49% | |||||||||
US dollar clearing volume (#MM) | 38 | 38 | 38 | 2% | 1% | 149 | 146 | 2% | |||||||||
Assets under custody and/or administration (AUC/AUA) ($T) | 22 | 21 | 24 | 6% | (7)% | - | - | - |
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information.
- Excludes gain / (loss) on credit derivatives as well as the mark-to-market on loans at fair value. For additional information, please refer to Footnote 6.
- Includes credit reserve build / (release) for loans and provision for credit losses on unfunded lending commitments.
- Includes provisions for HTM debt securities and other assets.
3
Institutional Clients Group
ICG revenues of $9.2 billion increased 3% (including gain/(loss) on loan hedges)(6), as strength in TTS, Securities Services and Fixed Income Markets was partially offset by a decline in Banking and Equity Markets.
Services revenues of $4.3 billion increased 32%. Treasury and Trade Solutions (TTS) revenues of $3.3 billion increased 36%, driven by 61% growth in net interest income, partially offset by a 1% decrease in non-interest revenue. Strong performance in TTS was driven by business actions, which included managing deposit repricing, deepening of relationships with existing clients, and significant new client wins across all segments, as well as the benefit of higher interest rates. Securities Services revenues of $1.0 billion increased 22%, as net interest income increased significantly, driven by higher interest rates across currencies, partially offset by a 9% decrease in non- interest revenue due to the impact of lower market valuations on assets under custody and administration.
Markets revenues of $3.9 billion increased 18%, largely driven by growth in Fixed Income Markets. Fixed Income Markets revenues of $3.2 billion increased 31%, driven by strength in rates and currencies. Equity Markets revenues of $789 million were down 14%, primarily reflecting reduced client activity in equity derivatives, partially offset by growth in prime services.
Banking revenues of $0.9 billion decreased 62%, including gain/losses on loan hedges in the current quarter and the prior-year period. Excluding gain/losses on loan hedges, Banking revenues of $1.2 billion decreased 48%, driven by lower revenues in Investment Banking and Corporate Lending. Investment Banking revenues of $645 million decreased 58%, as heightened macroeconomic uncertainty and volatility continued to impact client activity. Excluding gain/losses on loan hedges, Corporate Lending revenues decreased 26% versus the prior-year period, driven by lower volumes, higher credit default swap premiums, and impacts of foreign exchange translation.
ICG operating expenses of $6.6 billion increased 6%, driven by transformation investments, business-led investments, and volume-related expenses, partially offset by the impacts of foreign exchange translation and productivity savings.
ICG cost of credit of $56 million, compared to $(281) million in the prior-year period, included a net ACL release for loans and unfunded commitments of $(54) million and net credit losses of $104 million. The ACL release was primarily driven by the reduction of certain direct exposures in Russia, partially offset by an increase related to the deterioration in macroeconomic assumptions.
ICG net income of $1.9 billion decreased 18%, largely driven by the higher expenses and the higher cost of credit, partially offset by the higher revenues.
4
Personal Banking and Wealth Management | 4Q'22 | 3Q'22 | 4Q'21 | QoQ% | YoY% | 2022 | 2021 | % r | |||
($ in millions, except as otherwise noted) | |||||||||||
Branded Cards | $2,376 | $2,258 | $2,073 | 5% | 15% | 8,892 | 8,190 | 9% | |||
Retail Services | 1,420 | 1,431 | 1,290 | (1)% | 10% | 5,450 | 5,082 | 7% | |||
Retail Banking | 608 | 642 | 624 | (5)% | (3)% | 2,501 | 2,506 | - | |||
Total US Personal Banking revenues | 4,404 | 4,331 | 3,987 | 2% | 10% | $16,843 | $15,778 | 7% | |||
Private Bank | 589 | 649 | 688 | (9)% | (14)% | 2,762 | 2,943 | (6)% | |||
Wealth at Work | 195 | 182 | 177 | 7% | 10% | 730 | 691 | 6% | |||
Citigold | 908 | 1,025 | 933 | (11)% | (3)% | 3,882 | 3,915 | (1)% | |||
Total Global Wealth Management revenues | 1,692 | 1,856 | 1,798 | (9)% | (6)% | 7,374 | 7,549 | (2)% | |||
Total revenues, net of interest expense | 6,096 | 6,187 | 5,785 | (1)% | 5% | $24,217 | $23,327 | 4% | |||
Total operating expenses | 4,307 | 4,077 | 4,017 | 6% | 7% | $16,258 | $14,610 | 11% | |||
Net credit losses | 908 | 723 | 568 | 26% | 60% | 3,021 | 3,061 | (1)% | |||
Net ACL build / (release) | (a) | 752 | 379 | (869) | 98% | NM | 718 | (4,300) | NM | ||
Other provisions | (b) | 6 | 7 | 5 | (14)% | 20% | 15 | 15 | - | ||
Total cost of credit | 1,666 | 1,109 | (296) | 50% | NM | $3,754 | $(1,224) | NM | |||
Net income | $114 | $792 | $1,613 | (86)% | (93)% | $3,319 | $7,734 | (57)% | |||
Key Indicators ($B) | |||||||||||
US Personal Banking average loans | 180 | 174 | 162 | 3% | 11% | 170 | 159 | 7% | |||
US Personal Banking average deposits | 111 | 115 | 114 | (3)% | (3)% | 115 | 112 | 3% | |||
US cards average loans | (c) | 143 | 138 | 128 | 4% | 12% | 136 | 124 | 9% | ||
US credit card spend volume | 152 | 145 | 142 | 5% | 7% | 574 | 503 | 14% | |||
Global Wealth Management client assets | 746 | 708 | 814 | 5% | (8)% | - | - | - | |||
Global Wealth Management average loans | 150 | 151 | 150 | (1)% | - | 151 | 148 | 2% | |||
Global Wealth Management average deposits | 320 | 313 | 323 | 2% | (1)% | 320 | 305 | 5% | |||
Note: Please refer to the Appendices and Footnotes at the end of this press release for additional information. |
- Includes credit reserve build / (release) for loans and provision for credit losses on unfunded lending commitments.
- Includes provisions for policyholder benefits and claims, HTM debt securities and other assets.
- Credit card spend volume was previously referred to as card purchase sales
Personal Banking and Wealth Management
PBWM revenues of $6.1 billion increased 5%, as net interest income growth, driven by strong loan growth across US Personal Banking and higher interest rates, was partially offset by a decline in non-interest revenue, driven by the lower investment product revenues in Global Wealth Management and higher partner payments in Retail Services.
US Personal Banking revenues of $4.4 billion increased 10%. Branded Cards revenues of $2.4 billion increased 15%, primarily driven by the higher net interest income. In Branded Cards, card spend volumes increased 9% and average loans increased 13%. Retail Services revenues of $1.4 billion increased 10%, driven by higher interest- earning balances, partially offset by the higher partner payments. Retail Banking revenues of $608 million decreased 3%, primarily driven by lower mortgage volumes.
Global Wealth Management revenues of $1.7 billion decreased 6%, as investment product revenue headwinds, more than offset net interest income growth from the higher interest rates particularly in Asia. Excluding Asia(7), revenues were largely unchanged.
PBWM operating expenses of $4.3 billion increased 7%, primarily driven by transformation investments and other risk and control initiatives.
PBWM cost of credit was $1.7 billion compared to $(296) million in the prior-year period. The increase was largely driven by a net build in the ACL for loans and unfunded commitments of $752 million in the current quarter, primarily driven by cards volume growth and the deterioration in macroeconomic assumptions, compared to a net ACL release of $869 million in the prior-year period. Net credit losses of $908 million increased 60% from near historically low levels, reflecting ongoing normalization, particularly in Retail Services.
PBWM net income of $114 million decreased 93%, driven by the higher cost of credit and the higher expenses, partially offset by the higher revenues.
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Citigroup Inc. published this content on 13 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 January 2023 10:33:09 UTC.