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April 14, 2022

Citigroup tops earnings estimates on better-than-expected trading revenue

Here are the numbers:

  • $2.02 per diluted share vs $1.55 a share Refinitiv estimate
  • Revenue: $19.19 billion vs $18.15 billion estimate

How big of a hit will Citigroup take on its exposure to the Russian invasion of Ukraine? That will be one question posed to Citigroup CEO Jane Fraser, who took over the New York-based bank a year ago. In that time, she’s announced plans to exit more than 13 markets outside the U.S. in a bid to improve the bank’s returns.

Citigroup, the most-global of big U.S. banks with operations in more than 100 countries, likely has the most significant exposure to the Ukraine conflict. Analysts will be keen to understand the various impacts of the war on the firm, including on its planned sale of a Russian consumer banking unit.

Last month, Fraser gave analysts a new set of financial targets, including a medium-term goal for returns on tangible common equity, a key banking industry metric, of about 11% to 12%. The event was a chance for the bank to reset expectations after years of underperforming peers including JPMorgan Chase and Bank of America.

Like the rest of the industry, Citigroup is expected to experience a slowdown in investment banking revenue, somewhat offset by a benefit from rising interest rates.

Despite already trading at the lowest valuation among peers, Citigroup shares have lost 17% this year, compared with the 10.5% drop of the KBW Bank Index.

On Wednesday, JPMorgan said first-quarter profit slumped 42% as it posted losses tied to Russia sanctions and set aside money for future loan losses. After the report, its shares fell and hit a 52-week intraday low.

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