Citigroup reports steep fourth quarter losses tied to United States tax reform

Citigroup reports steep fourth quarter losses tied to United States tax reform

Lower tax rates mean the bank can stick to its multiyear plan to pay out at least $60 billion in capital to shareholders even after booking a larger-than-forecast charge of $22 billion to adjust to the new tax regime, the bank said Tuesday. Banks have long paid some of corporate America's highest effective tax rates, which means they benefit more when rates are reduced. It forces them to take one-time hits on earnings held overseas and changes the treatment of deferred tax assets, both of which affect Citigroup in particular.

Bank of America Corp, the second-biggest US lender, and investment banking house Goldman Sachs Group Inc are expected to report fourth-quarter results on Wednesday.

But for Citigroup, the fourth-largest USA bank by assets, the loss is just a temporary hiccup.

Citigroup said Tuesday its effective tax rate will probably fall to about 25 percent this year and potentially lower afterward. That could save the bank billions of dollars over the next few years.

Citigroup Inc.'s (C) fourth-quarter profit was erased by a giant one-time charge related to the new tax law.

However, fixed income markets revenue decreased 18 percent due to continued lower volatility in the quarter as well as the comparison to a more robust trading environment in the prior year period as a result of the US elections.

Lagging competitors in growth and not earning its cost of capital, Citigroup's share valuations have not kept up with peers, such as JPMorgan and Bank of America. Analysts expected revenue of $17.22 billion.

Citigroup today announced an enormous $22bn (£16bn) charge from Donald Trump's tax changes which pushed the USA bank to its first loss since 2009, but distracted from otherwise above-expectations results.

Adjusted to exclude the major tax charge, net income rose 4 percent to $3.7 billion. Earnings at the institutional-clients group, which houses the investment bank and the global payments business, fell 7 percent to $2.2 billion.

Fixed income markets revenue retreated 18% over the quarter, and equity markets revenue dropped 23% due to derivatives losses of approximately $130m from a single client.

The client is troubled South African furniture retailer Steinhoff International, a source familiar with the matter told Reuters.

Other banks including JPMorgan Chase are also taking such hits, although Citi's is particularly big.

The huge tax charges overshadowed what was an otherwise largely unremarkable batch of quarterly results.

Related News:

  • Final Fantasy 15 Royal Edition And $20 Upgrade Announced For PS4/Xbox One

    Final Fantasy 15 Royal Edition And $20 Upgrade Announced For PS4/Xbox One

    With weapons, Regalia auto skins and item sets , this amounts to over a dozen DLC items in total. The Royal Edition on PS4 and Xbox One include the same content as the Windows Edition .
    Manchester United see off Stoke to shrink City lead to 12 points

    Manchester United see off Stoke to shrink City lead to 12 points

    Stoke - who appointed Paul Lambert to replace Mark Hughes as manager on Monday - make seven changes from their defeat to Coventry. Another slick performance from the France global , who teed up the first two goals and produced many other eye-catching passes.
    Australian Open: Nadal starts with a victory, Venus Williams loses

    Australian Open: Nadal starts with a victory, Venus Williams loses

    Spain's David Ferrer, a former top-10 player, failed to advance to the second round in a Grand Slam for the second time in a row. The 25-year-old appeared crushed by the defeat and snapped sarcastically at reporters when asked where he would go from there.
  • Current immigration system jeopardises US security: White House

    Current immigration system jeopardises US security: White House

    Trump has drawn criticism at home, from Republicans and Democrats and from overseas for the comments attributed to him. But the comments about Haiti and African countries, which Trump has denied making, complicated negotiations further.

    Reporter Shouts 'Are You Racist?' at Trump after MLK Jr. Proclaimation

    Donald Trump's ex-wife, Ivana Trump, has said the President may occasionally say "silly" things but he's "definitely not racist". The president, according to the reports, also said the United States should accept more immigrants from places like Norway .
    Houston Rockets Players Try to Enter Clippers Locker Room After Tense Game

    Houston Rockets Players Try to Enter Clippers Locker Room After Tense Game

    Paul ran over to the referees in disbelief. "Well, after he said what he said, I said the same thing back", Griffin said. Both were given a technical foul and Mike was captured on camera shouting "F*ck you!" to Blake as he walked away.
  • South Korea refuses to send back 12 North Korean defectors

    South Korea refuses to send back 12 North Korean defectors

    Murray mused on just how much help, if any, North Korean players can give her current team if the government's wish comes true. Critics question how long the warmer mood can last without any serious discussion on the North's nuclear disarmament.
    Seal accused of sexual battery by actress

    Seal accused of sexual battery by actress

    The Los Angeles County Sheriff's Department told TMZ a report was filed for sexual battery and was now under investigation. Seal later backtracked on the criticism, saying he had not been targeting Oprah specifically, but the industry in general.
    Innocent teen caught in crossfire of Saturday's shooting has died

    Innocent teen caught in crossfire of Saturday's shooting has died

    An innocent 15-year-old who was shot during a night out with his family in Vancouver over the weekend has died of his injuries. The 15-year-old boy from Coquitlam was hit by a stray bullet as two men exchanged gunfire on Saturday night.
  • Evacuees increases as Mayon nears eruption

    Evacuees increases as Mayon nears eruption

    It warned residents to be vigilant against lava flows, lahars and sediment-laden streams along channels that flow from the crater. Mayon is in coconut-growing Albay province, about 340 kilometres (210 miles) southeast of Manila .
    Sex abuse horror of Olympic superstar Simone Biles by USA Gymnastics doc

    Sex abuse horror of Olympic superstar Simone Biles by USA Gymnastics doc

    Simone Biles , the United States' most decorated gymnast of all time , says she was the victim of sexual abuse by Larry Nassar . Nassar's began practicing in 1980, but an Indianapolis Star investigation in 2016 is when the true timeline starts.
    Homeland Security secretary grilled over Trump 's-hole' comments

    Homeland Security secretary grilled over Trump 's-hole' comments

    Nielsen said her agency was talking with the state about how it can improve its alert system. Nielsen said she did not dispute that Trump "was using tough language" in the meeting.


Most liked

Thought Khloe will never have kids, says Kris
She ADORES being a "Newsy" for Brit + Co, covering all of the latest tidbits of awesomeness that you want to read about. If she ends up having her baby soon, hopefully, she will end up sharing the news with the fans once the baby is born.

Japanese national broadcaster issues false North Korea missile alert
The risk of a missile attack on Japan is real, however, with North Korea repeatedly threatening to target the nation. The news service corrected the error five minutes later, with an on-air host bowing deeply in apology.

Ford Mustang Bullitt arrives in Detroit with 475 horsepower
Ford has announced the 2019 Mustang Bullitt just in time for the 50th anniversary of the Steve McQueen-starrer, " Bullitt ". We don't know much about it yet, but Ford says the Mach 1 will be fully electric.

Trump's cognitive ability is normal, says White House doctor
It also noted his social history, commenting on his "healthy lifestyle choices" including "healthy diet" and daily exercise. Dr Jackson reported that the 6ft 3in president weighed in at 239lb, 3lb heavier than he was in September 2016.

France's Macron seeks more cooperation with United Kingdom on migration
A further 85,000 people were reportedly stopped at French borders and refused entry to the country. Mr Macron talked briefly with Sudanese migrants at the centre in Croisilles, home to 63 people.

Amazon launches new Echo Spot in UK
Although we reckon most customers will be dumping their Echo Spots on a bedside table, Supplee says it's more versatile than that. The Amazon Echo Spot is a little more expensive than the new Echo, though, and in turn much more expensive than an Echo Dot.

Pastor Blasts Trump's 'Shithole' Feedback In Entrance Of Mike Pence
Pence and his wife Karen were invited to the historically black church which was founded soon after the Emancipation Proclamation. I think the best way to honour Dr King's legacy is to speak up for and stand up for the values for which he spoke and stood.

U.S. stocks open higher on strong corporate earnings
THE BITCOIN TRADE: The price of bitcoin was down 14.3 percent to $11,647, according to the tracking site CoinDesk. Deutsche Bank lost 0.8 per cent after it was accused in a lawsuit of conspiring to rig a Canadian benchmark rate.

Nestle bypasses Hershey's, selling its candy business to Italian company
Ferrero was founded as a family business in Alba, Italy, in 1946, and entered the US market in 1969 with Tic Tac breath mints. Nestle said in a statement announcing the sale that it remains "fully committed" to its chocolate business around the world.

Africa for 258; need 287 to clinch second Test
De Villiers was in control against the Indian bowlers while Elgar, who completed his ninth Test half-century, was resolute. Ashwin claimed the final scalp of the innings to get one into the wickets column, his final figures reading 1 for 78.

GE to Take $6.2 Billion Charge Tied to Finance Unit's Insurance Reserves
It worsened, as 112 investors sold GE shares while 818 reduced holdings. 22 funds opened positions while 64 raised stakes. Vaughan David Investments Inc decreased General Electric Co (GE) stake by 75.06% reported in 2017Q3 SEC filing.

Violations Revealed at Mar-a-Lago Resort After State Inspection in November
According to financial disclosure forms filed by Trump, the club had $29.7 million in revenue from June 2015 to May 2016. The federal government, however, returned it to the family eight years later, and Trump bought it for $5 million in 1985.

Police say dying of Cranberries' Dolores O'Riordan not suspicious
London police have found no evidence of foul play in the sudden death of the Cranberries frontwoman, Dolores O'Riordan. In 2014, she began performing with musicians Ole Koretsky and Andy Rourke of The Smiths as a trio act named D.A.R.K.

Concerns about Dorset schools after Carillion goes into liquidation
During the process, the PPF will check the accuracy of all the data passed to it to ensure members receive the right compensation. But Carillion announced its own "compulsory liquidation" just over an hour before the London Stock Exchange opened on Monday.

Lincoln Park man in USA 29 years deported to Mexico
However, he was told he had to leave the country by no later than January 15 - today. "It's just a nightmare", said Cindy Garcia. Immigration and Customs Enforcement , said since Monday was a holiday, he would have no comment until Tuesday.