Citigroup Misses Big On Top And Bottom Line: Earnings Negative Absent Loan Loss Release

Tyler Durden's picture

Following last week's Easter egg by JPMorgan, the misses by financials continue, with Citi crapping the bed following a big miss in both top and bottom line after reporting $17.2 billion and $0.38 EPS on expectations of $18.5 billion and $0.52 per share. The biggest hit to the top line was the DVA adjustment courtesy of tightening CDS spreads, which while adding to top and bottom line in Q3, took out $1.9 billion in Q4 - of course like everything else it was also priced in. And while we are confident the full earnings presentation will be a labyrinth of loss covering, the first thing to realize is that absent a $1.5 billion in loan loss reserve releases, the bank would have reported negative net income, which was $1.364 billion pretax. Yet there is no way to explain the absolute bloodbath in the Securities and Banking group, which saw revenues implode by 53% from $6.7 billion to $3.2 billion Y/Y, and down 10% Q/Q. Notably, Lending revenues down 84% from $1 billion to $164 million. RIP Carry Trade.

Some highlights from the earnings report, pre-spun for public consumption:

  • Fourth Quarter Revenues of $17.2 Billion Down 7% from the Prior Year Period
  • Fourth Quarter Net Credit Losses Declined 40% from the Prior Year Period to $4.1 Billion
  • Full Year 2011 Net Income of $11.3 Billion up 6% from $10.6 Billion in 2010
  • Full Year 2011 Revenues of $78.4 Billion Compared to $86.6 Billion in 2010 Driven by $6.4 Billion Decline in Citi Holdings Revenues
  • Citicorp Loans of $465.4 Billion Grew 14% versus Prior Year
  • Citi Holdings Loans of $181.8 Billion Declined 25% versus Prior Year
  • Full Year 2011 Net Credit Losses of $20.0 Billion Compared to $30.9 Billion in 2010
  • Loan Loss Reserve Release of $1.5 Billion in Fourth Quarter, Down 35% from the Prior Year Period
  • Tier 1 Common of $115.1 Billion, Tier 1 Common Ratio Increased to 11.8%
  • Year-over-Year, Book Value Per Share up 8% to $60.78, Tangible Book Value Per Share(2) up 12% to $49.81

Full earnings supplement presentation:


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Gauthijm's picture

Why would anyone invest in this sector is beyond me..

What an absolute mess in every way



LawsofPhysics's picture

Likewise, looking at her it is clear it will take at least two of us to do the job.

WonderDawg's picture

This is what I was expecting when I bought Feb puts on Citi a couple of months ago. They went green for a little while, but they've been bleeding ever since the week after Thanksgiving as the stock price goes up and theta burns off. I can only hope this news has the desired effect, but of course the stock will probably jump two dollars today. It's a fucked up world.


Chief KnocAHoma's picture

Yet the futures market is pointing to a +107 open.

Vexxing... yes provacative.

Is that day light I see at the other end of this tunnel, or a train?

PS - That Jesica Biel is okay if you like your women like that. I prefer mine pudgy and bitchy, or maybe that is just what i am used to.


cossack55's picture

Train (diesel-electric engine, since coal is evil)

justanothernerd's picture

It's the only sector that the government won't let go bankrupt.

SheepDog-One's picture

The ONLY reason people jump on this banking crap is that they expect to be rescued!

Hansel's picture

Priced in.  Why else would S&P futures be sitting at 1300?  Now that they are, everyone can sleep in.  The market has already made its move for the day.

The Limerick King's picture



Awash in liquidity traps

The market is like shooting craps

But no need to fear

Or cover your rear

World markets have priced-in collapse


Comay Mierda's picture

the technicals have been hinting for 2 weeks now that spx would target 1300+

brewing's picture

yamma hamma it's fright night...

Sheikh Dani's picture

Maybe this was already priced in ....... ha

Rainman's picture

Those loan loss reserve releases are a real moneymaker ( slaps self while typing ).

fonzannoon's picture

WFC beat. I wonder how far the bar was lowered so they could at least celebrate one bank hitting numbers.  I am so glad I am short financials because....oh wait.....I see green everywhere.

Sandy15's picture

So with this miss, WHAT is levitating this market?


Can anyone say F-E-D-E-R-A-L   R-E-S-E-R-V-E.............

Quincy's picture

LTRO baby ... nothing like the smell of free money in the morning to turn shorts into longs!

LTRO is nothing but backdoor monetization that keeps rates at the short end of the curve manageable. We'll see nothing but short duration issuance while there's volatility.

Just wait until it's the FED's turn ...

RiverRoad's picture

Yup.  And good for +100 on the DOW.

Dorky's picture

When the fucking economy collapses and the S&P 500 is at 2,400, it is also priced in.

"Priced in" is such a cheap term that it is much cheaper than a whore.

My ass is "priced in" too.

Flesh Wound's picture

Friday is going to be interesting!

fonzannoon's picture

No disrespect but why would Friday be interesting? US downgrade? Bullish. France downgrade? Bullish. Super Committe crapping the bed? Bullish....Greece default? Orderly....bullish.....what is going to happen Friday that is going to change anything?

cossack55's picture

It will be reported that the strange noises being heard worldwide are actually Martian tripeds but Tom Cruise is available to respond with backup by Tim Tebow.

Cdad's picture

Well, of course they need to pull from the loan loss reserves  After all, they need to start building up the bond loss reserve fund.

What an abysmal excuse of a company. 

cossack55's picture

Hey, buddy! I'll have you know that is MY mortgage holder (maybe) you are bashing!!!!

Please continue.

Everybodys All American's picture

How long will it be before another round of layoffs are once again announced at these banks so they can justify earnings expectations for the next qtr. 

LawsofPhysics's picture

And the "markets" will rally on absolutely no volume.  Boring world indeed.  Where have all the "animal spirits" gone.  Oh that is right, selling is now illegal.

miker's picture

Saving the banks is paramount.  The banks represent the foundation of the financial system.  If faith in them goes, people will pull their money; not just out of banks but stocks, bonds, etc.  Then the games up because the governement would have to stimulate (TARP) or print to keep everything propped up.  Once that begins, people lose faith in the currency and rush to get out.....hyperinflation and collapse of the system.

That is why the banks will not be allowed to fail.

WonderDawg's picture

Wow. With insight like that, can you tell me who will win the 49er's/Saints game last weekend?

Defiant1968's picture

Green Bay is a lock - they have a great pass rush  -  Book IT

francis_sawyer's picture

Gee piker thanks... I never looked at it that way...

LawsofPhysics's picture

Soon enough, keeping the banks whole will be like trying to suspend gravity or plate tectonics.  The ONLY way the financial system can be saved would be through prosecution of the fraud.  So unless the financial elites are going to ask their political puppets to issue a grand jury summons on themselves, I am afraid it is too late, the moral hazard is growing each day.  History shows us how it ends.  Boring world indeed.  Thanks for making the PMs shine even brighter. 

Teamtc321's picture

Standing ovation, Ogolfer clap. 

SnobGobbler's picture

if greece is ready for default;why not pad the indexes so a 200pt hit to the s&p wont hurt as bad...

azzhatter's picture

Has Cramer issued a buy, buy,buy yet? Has Bovine been fellating Vikles all morning? Rally time

lizzy36's picture

So when C rant 47% in October 2011, was the efficient forward looking market anticipating this AWESOME quarter?

kevin22's picture

Inventure India is a management consulting firm has an unparalleled depth of knowledge and resources combined with functional and industry expertise for geographical reach. We help leaders make distinctive, lasting and substantial enhancement to the performance of their organizations.

Franchise opportunities in india

Franchise business plan

Franchise consultants in india

Investment outside india


New Market Bhavishya is one of the leading Commodity Advisory service provider in India. Online silver trading tips