Citigroup Slips as Revenue Miss, Russia Charge Cloud Results
The bank absorbed a $1.2 billion loss on the exit from its Russian consumer business, overshadowing a profit beat and strong investment banking performance.
Citigroup (NYSE: C) shares fell in trading on Tuesday after the banking giant reported mixed fourth-quarter results, with a significant revenue miss and a hefty charge related to its Russian exit weighing on investor sentiment.
The stock declined 2.8% to $113.07 in morning trading as investors digested a complex quarter. While the bank posted earnings per share of $1.81, beating analyst estimates of $1.72, its quarterly revenue of $19.9 billion fell well short of the $21.2 billion consensus expectation.
A key driver of the disappointing results was a pre-tax loss of $1.2 billion linked to the sale of its Russian consumer banking operations, a move part of CEO Jane Fraser's broader strategy to streamline the bank and divest from international retail markets. According to the company's earnings statement, the charge was a significant factor in the quarter's outcome.
Despite the headline miss, there were notable bright spots in Citigroup’s performance. The bank's Institutional Clients Group had a strong quarter, buoyed by a resurgence in its investment banking division. M&A advisory fees surged an impressive 84%, capping a record year for dealmaking, as reported by Bloomberg. This performance highlights underlying strength in its core Wall Street operations, even as other parts of the business faced headwinds.
The results underscore the ongoing transformation at the nation's third-largest bank. Under Fraser, Citigroup has been working to simplify its structure and boost profitability by exiting non-core businesses. The disposition of the Russian assets marks a significant step in this multi-year effort. This strategic direction continued with news that Citigroup is exploring the sale of more stakes in its Mexican unit, Banamex, ahead of a planned IPO.
Management signaled confidence in its long-term plan, reaffirming a key profitability target of 10-11% return on average tangible common shareholders' equity (RoTCE) for 2026. The bank also continued its aggressive capital return program, delivering $5.6 billion to shareholders in the fourth quarter through a combination of common dividends and share repurchases, as detailed in its 8-K filing with the SEC.
Even with the stock's negative reaction, many analysts remain positive on the bank’s trajectory. The consensus analyst price target for Citigroup sits at $131.33, suggesting significant upside from its current level. Investors will be closely watching for further progress on Fraser's strategic overhaul and whether the underlying strength in investment banking can offset weaknesses elsewhere in the coming quarters.