While Citi's stock is getting hammered in the pre-market for missing both top- and bottom-lines, three things stand out to us at first glance. First, legal costs were well above expectations; second, they reduced their exposure to GIIPS during Q4 - just when the rip-roaring rally in Europe really took off; and third, and more importantly, Citi did not take a huge loan loss reserve drawdown like every other bank.
- *CITIGROUP 4Q REV. $18.66B, EST. $18.92B :C US
- *CITIGROUP 4Q ADJ. EPS 69C WITH/WITHOUT ITEMS MISSES EST. 96C
- *CITI 4Q GIIPS NET CURRENT FUNDED EXPOSURE $8.9B VS 3Q $9.5B
- *CITIGROUP 4Q LOAN LOSS RESERVE RELEASE $86M VS $1.5B PRIOR YR
The question is, why would Citi not take advantage of the investing public's ignorance like every other bank and release more from loan-loss-reserves - have they maxed out their previous releases? or are they less exuberant at the housing un-recovery? (we note that 90-179-Day Delinquencies rose)