Citigroup in profit after tax setback

Citigroup says its fourth-quarter profit surged from a year ago, when it took a large writedown related to changes in US tax.

Net income was $4.3bn, versus a loss of $18.9bn a year ago, and earnings per share were $1.64. Analysts polled by Refinitiv expected $1.55 a share.

The bank overcame a difficult quarter for the trading business, which posted a 14% decline in revenue to $2.6bn, due to a volatile December marked by many clients stepping away from the market.

Overall revenue was $17.1bn, down 2% from a year ago.

Still, profit grew thanks to a lower overall tax rate and a 4% drop in expenses from a year earlier, to $9.9bn.

Taking out the tax write-off from a year ago and removing a small one-time tax-related gain in the fourth quarter, net income grew 14% from a year ago, to $4.2bn.

The charges in 2018 related to a decline in the value of deferred tax assets the bank accumulated during the financial crisis, after the 2017 law slashed the corporate tax rate.

Citigroup shares were down 0.5% in premarket trading in New York.

Citigroup has been among the hardest-hit stocks in the banking sector, as investors worried about the impact of slowing global growth on its vast international business.

Global consumer banking revenue at $8.4bn was flat year on year, led by 1% growth in North America.

Revenue was flat in Mexican consumer banking, and down 4% across Asia.

Revenue in the bank’s credit card business, where investors have been hoping to see a pivot to growth, was up 1% from a year ago, to $5.1bn.

One strong area was the treasury and trade services unit, which serves multinational corporations around the world. That was up 7% to $2.4bn.