Citigroup profit falls on legal and restructuring charges

The Citibank Corporate Office & Headquarters is viewed in midtown Manhattan.
Timothy A. Clary | AFP | Getty Images
The Citibank Corporate Office & Headquarters is viewed in midtown Manhattan.

Citigroup, in the midst of a pullback from consumer banking in a number of international markets, eked out a slim fourth-quarter profit after taking charges of $3.5 billion to settle legal claims and overhaul operations.

The total charges matched the figure foreshadowed by Chief Executive Mike Corbat in December, but the earnings fell short of the average market estimate.

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Adjusted net income fell to $346 million, or 6 cents per share, from $2.60 billion, or 82 cents per share, a year earlier, the No. 3 U.S. bank by assets said.

Analysts on average had expected earnings of 9 cents per share, including charges, according to Thomson Reuters I/B/E/S.

Citi's shares were little changed in premarket trading on Thursday. (Click here to get the latest quotes.)

Adjusted revenue fell 0.8 percent, largely due to the strong U.S. dollar and weaker results from fixed-income trading.

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Citi is the most international of the big U.S. banks, with about half of its business coming from abroad.

"While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities ...," Corbat said in a statement. "Although we made some difficult decisions ... I believe they allowed us to put our franchise in a position to have a successful 2015."

With fixed-income markets remaining tough, Citi's forecast of a 5 percent decline in markets revenue in the quarter turned into a 16 percent drop. JPMorgan Chase and Bank of America also reported declines in fixed-income revenue.

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Consumer banking revenue rose 3 percent on a constant-dollar basis, reflecting strength in Citi's North American business as well as one-time gains from the sale mortgage loans.

Citi has taken nearly $3.4 billion in repositioning charges since Corbat became CEO in October 2012, including costs for shutting down or selling retail businesses in 16 countries.

Adjusted operating expenses increased 21 percent.

The bank's most recent legal woes stem from government probes into alleged manipulation of currency markets and Libor interest rates as well as lax compliance with money laundering rules. The company still faces other possible actions by the U.S. Department of Justice and Federal Reserve.

Citigroup made further progress with what is left from the financial crisis of its portfolio of troubled assets. The portfolio, known as Citi Holdings, generated revenue of $1.31 billion in the quarter, compared with $1.59 billion in the previous quarter, because of smaller gains from asset sales.