Citigroup (C) Up 4.6% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Citigroup's recent earnings report shows a mixed performance with a notable increase in investment banking revenues, but a decline in adjusted net income per share for 2024 compared to expectations [2][3][4]. Financial Performance - Citigroup's adjusted net income per share for Q4 was $1.34, exceeding the Zacks Consensus Estimate of $1.25, while the adjusted net income per share for 2024 was $4.04, missing the estimate of $5.88 [2]. - The company reported a net income of $2.9 billion for Q4, a significant recovery from a loss of $1.8 billion in the prior-year quarter, and a full-year net income of $12.7 billion, up 37.4% year over year [3]. Revenue and Expenses - Revenues for Q4 increased by 12.3% year over year to $19.6 billion, surpassing the Zacks Consensus Estimate of $19.55 billion, while full-year revenues reached $81.2 billion, up 3% year over year [4]. - Net Interest Income (NII) fell slightly to $13.7 billion, but non-interest revenues (NIR) surged by 62% to $5.8 billion. Operating expenses decreased by 18% year over year to $13.2 billion [5]. Segment Performance - The Services segment saw revenues of $5.17 billion, up 15% year over year, while the Markets segment's revenues increased by 36% to $4.6 billion [6][7]. - Banking revenues rose by 27% to $1.24 billion, and U.S. Personal Banking revenues increased by 6% to $5.2 billion [7]. - The Wealth segment's revenues reached $2 billion, a 20.4% increase year over year, driven by higher investment fee revenues and net interest income [8]. Balance Sheet and Credit Quality - Citigroup's deposits decreased by 1.8% to $1.28 trillion, while loans increased slightly to $694.5 billion [10]. - Total non-accrual loans fell by 16% to $2.7 billion, and provisions for credit losses decreased by 27% to $2.59 billion [11]. Capital Position - The Common Equity Tier 1 capital ratio improved to 13.6%, and the supplementary leverage ratio remained stable at 5.8% [12]. Future Outlook - Management projects revenues for 2025 to be between $83.5 billion and $84.5 billion, driven by investment banking and fee growth in the Wealth segment [13]. - Expected expenses for 2025 are slightly lower than $53.8 billion, indicating a focus on cost reductions and productivity savings [14]. - For the medium term, revenue growth is anticipated to be between $87 billion and $92 billion, with expenses expected to be below $53 billion [15]. Market Sentiment - Citigroup currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [19].