Citigroup announced today, Friday, that its profits fell in the fourth quarter, with increased provisions in anticipation of deteriorating economic conditions, and with a decrease in investment banking revenues due to a significant decrease in deal-making activities.
stock fell City By about 3% in pre-market trading, after fears of a possible recession prompted the bank to add $640 million to its reserves in the fourth quarter, according to Reuters.
That compares with the bank releasing $1.37 billion from its reserves in 2021, when pandemic-related loan losses did not materialize.
Citi’s investment banking revenue plunged 58% amid a significant slowdown in mergers and acquisitions activity last year as companies avoided deals, high interest rates, the war in Ukraine and heightened economic uncertainty.
However, dealers resorted to rearranging their portfolios in the face of the increasing volatility, which boosted Citi’s activities in the markets. The bank’s revenue jumped 6% to $18 billion.
Net profit was $2.5 billion, or $1.16 per share, for the three months ended Dec. 31, compared with $3.2 billion, or $1.46 per share, in the same period a year earlier.
