Proactive Investors - Citigroup Inc (NYSE:C) reports fourth-quarter earnings on Friday that are likely to be decimated by charges and reserves totalling $3.78 billion.
In a regulatory filing, the bank said its 4Q results were impacted by a $1.3 billion reserve build associated with its exposures outside the US, including currency and geopolitical risks in Argentina and Russia.
On top of that, as a result of the small banks’ crisis of early 2023, which saw the collapse of Silicon Valley Bank and Signature Bank, the Federal Deposit Insurance Corporation (FDIC) levied a charge of roughly $1.7 billion.
Citi chief financial officer Mark Mason said in a statement that the bank chose to provide additional context ahead of its earnings announcement.
“While we rarely provide information about the results of the quarter in advance of scheduled earnings announcement dates, we thought this was a prudent step in our commitment to building credibility and being transparent with our stakeholders, including our colleagues,” Mason said.
Restructuring charges over the quarter amounted to $780 million, largely driven by severance, non-cash asset impairments and other charges related to an organizational restructuring.
“While there are upfront costs to the organizational changes we’re implementing, there are clear benefits that will allow us to reduce our future expense base, as well as simplify our bank and strengthen our focus on clients,” Mason added.
Additionally, the bank said it recorded an approximate $880 million translation loss in revenues in Argentina in the quarter, as a result of the recent devaluation of the Argentine peso.
“Our ability to digest these charges and take reserves against potential future challenges is a testament to the strength and stability of our firm and how we continue to weather all types of market environments,” Mason said.
Ahead of the market open, Citi's shares were down 1.4% at $52.30.