• Net Income: Up nearly 40% to $12.7 billion for the full year.
• Revenue: Increased by 5% excluding divestitures, totaling $81.1 billion for the year.
• Fee Revenue: Up 17% for the year.
• Expenses: $53.8 billion, in line with target, excluding FDIC special assessment.
• Efficiency Ratio: Improved by 340 basis points.
• Return on Tangible Common Equity (RoTCE): Grew over 200 basis points, with a full-year RoTCE of 7%.
• Services Revenue: Up 9% to $19.6 billion.
• Markets Revenue: Increased 6% to $19.8 billion.
• Banking Revenue: Up 32% to $6.2 billion.
• Wealth Revenue: Increased 7% to $7.5 billion.
• US Personal Banking Revenue: Up 6% to $20.4 billion.
• CET1 Ratio: Ended 2024 at 13.6%, 150 basis points above regulatory requirement.
• Share Repurchase Program: $20 billion authorized, with $1 billion repurchased in Q4.
• Transformation Investment: $2.9 billion spent on transformation initiatives.
• Technology Investment: $11.8 billion focused on digital innovation and cybersecurity.

• Warning! GuruFocus has detected 6 Warning Sign with C.

Release Date: January 15, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• $Citigroup Inc(C-N)$ (NYSE:C) reported a strong fourth quarter with net income up nearly 40% to $12.7 billion for the full year.
• The company exceeded its full-year revenue target with a 5% increase in revenues, excluding divestitures.
• Citigroup Inc (NYSE:C) announced a $20 billion share repurchase program, reflecting confidence in its earnings power.
• The company achieved positive operating leverage across its five core businesses, with each generating growth.
• Citigroup Inc (NYSE:C) made significant progress in its transformation efforts, including the simplification of its organizational structure and the closure of three longstanding consent orders.

Negative Points

• Citigroup Inc (NYSE:C) adjusted its 2026 RoTCE target to 10% to 11%, down from previous expectations, due to increased investments in transformation and technology.
• The company faces challenges in data and regulatory reporting, requiring additional investments to meet regulatory expectations.
• Expenses remain elevated, with a focus on transformation and technology investments, impacting short-term financial targets.
• The company's US personal banking segment continues to deliver returns below the cost of capital, posing a hurdle for overall profitability.
• Citigroup Inc (NYSE:C) is still in the process of exiting its Banamex business, with the timing of the IPO dependent on regulatory approvals and market conditions.

Q & A Highlights

Q: Can you elaborate on the reduction in the RoTCE target for 2026 and the path to a 60% or lower efficiency ratio? A: Jane Fraser, CEO, explained that the reduction in the RoTCE target is due to increased investments in transformation, which are temporary. The focus remains on driving business performance and executing transformation. Mark Mason, CFO, added that the path to a lower efficiency ratio involves sustainable revenue momentum, eliminating inefficiencies, and leveraging transformation investments to lower costs over time.

Q: What are the expectations for the buyback program beyond the first quarter? A: Mark Mason, CFO, stated that the $20 billion buyback program reflects confidence in earnings momentum and the importance of buybacks given the current trading below book value. The target CET1 ratio is 13.1%, and as regulatory clarity improves, they will manage down to this target and potentially increase buybacks.

Q: How does the 10% to 11% RoTCE target for 2026 align with capital requirements? A: Mark Mason, CFO, confirmed that the 10% to 11% RoTCE target assumes a 13.1% CET1 ratio. The target will be adjusted as regulatory rules evolve, but the current assumption is based on this capital ratio.

Q: Can you clarify the expectations for card net charge-offs and provision builds for 2025? A: Mark Mason, CFO, indicated that net credit losses are expected to be at the high end of the given ranges for branded cards and retail services. Provision builds will be influenced by volume growth in USPB and macroeconomic factors affecting CECL calculations.

Q: What are the specific milestones needed to increase the pace of the buyback program? A: Mark Mason, CFO, emphasized that the target CET1 ratio is 13.1%, and they will manage down to this target. The consent order is not impacting capital actions, but the stress test results will be a factor in determining the buyback pace. There are no artificial constraints, and the focus is on sustainable franchise growth and regulatory requirements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.