Citigroup Inc. finished 2019 with stronger fourth-quarter earnings numbers than 2018, reporting $19.4 billion in net income on revenues of $74.3 billion at year’s end, compared with net income of $18 billion on revenues of $72.9 billion for the full year 2018.
The corporation recorded $5 billion in profits on $18.4 billion in revenues for the fourth quarter of 2019, representing a 7 percent uptick in earnings from the same quarter a year earlier, according to a company press release.
Citi stated that its earnings numbers reflect positive results across its institutional clients group (ICG) and global consumer banking (GCB). The company also noted that net income increased 15 percent from the prior-year period, attributing that fact to higher revenues and a lower effective tax rate, partially offset by higher expenses and an uptick in the cost of credit.
“Our earnings of $5 billion for the fourth quarter marked a strong finish to 2019,” Citi CEO Michael Corbat said in a press release. “Our full year return on tangible common equity of over 12 percent exceeded our target. Due to good client engagement, we drove balanced growth across our products and geographies, closing the year with 16 consecutive quarters of loan and deposit growth.”
In its North America division, Citi reported a 6 percent growth in mortgage loan balances year-over-year, to $45.7 billion in the fourth quarter of 2019 from $44.7 billion a year earlier.
Mortgage originations also continued their strong showing in 2019, rising to $6 billion in the fourth quarter of 2019. That’s up 20 percent from the previous quarter and a growth of 161 percent from the fourth quarter of 2018, when Citi originated $2.3 billion in mortgages.
Corbat also touted the growth Citi has seen with respect to branded cards among U.S. consumers, noting that the bank has “sustained its momentum in attracting digital deposits.” Additionally, he pointed out that the company continued to gain market share with respect to investment banking and that, despite a lower rate environment, Treasury and trade solutions increased revenue as the bank prioritizes making its global network vital to its clients.
“With increased revenues and disciplined expense management, we had positive operating leverage, even as we continued to make significant investments in the franchise,” Corbat said. “We ended 2019 with a Common Equity Tier One ratio of 11.7 percent and we are on track to deliver our commitment of returning over $60 billion of capital to our shareholders over a three-year period. We enter 2020 in a strong competitive position, from capital and liquidity to talent and technology. We continue to invest in areas where we see opportunities for client-led growth and in our infrastructure, in light of the enduring need to be an indisputably strong and stable institution.”
In terms of operating expenses, Citi reported $10.5 billion for the fourth quarter – an increase of 6 percent compared with the same period in 2018 – reflecting higher compensation and volume-related expenses, as well as continuing franchise-related investments, partially offset by efficiency savings and the wind-down of legacy assets.
Citigroup saw a 15 percent increase in the cost of credit to $2.2 billion in the fourth quarter, primarily driven by volume growth and seasoning in North America GCB, along with volume growth and several episodic downgrades in ICG. Overall credit quality remained stable, the company stated.