Citi CEO Jane Fraser speaks at the 2023 Milken Institute Global Conference on May 1, 2023 in Beverly Hills, California.
Mike Blake | Reuters
Citigroup warned investors late Wednesday: Fee Sales related to the depreciation of the Argentine peso and bank restructuring were much higher than the company's CFO disclosed just a few weeks ago.
The bank announced its fourth quarter financial results, which are scheduled to be released Friday morning. influenced This was due to an $880 million peso currency translation loss and $780 million in restructuring costs associated with CEO Jane Fraser's corporate simplification project.
These costs are higher than the “hundreds of millions of dollars” per deal that Chief Financial Officer Mark Mason told investors to expect at a Dec. 6 conference hosted by Goldman Sachs. Significantly higher.
“They gave guidance only a month ago, and now it's hundreds of millions of dollars higher in two categories,” Mike Mayo, a veteran banking analyst at Wells Fargo, said in a phone interview. “If investor trust is an issue, you shouldn't be doing something like this.”
Fraser Bank faces a critical moment this week as Citigroup releases fourth-quarter and full-year 2023 profits amid a restructuring effort aimed at making the bank a leaner and more profitable company. ing. Over the past two decades, Citigroup has been plagued by high costs and declining confidence after Fraser's predecessors failed to meet their targets. This gave Citigroup the lowest valuation among the six major U.S. banks.
In addition to the two charges, Citigroup on Wednesday said it will have to set aside $1.3 billion in reserves for exposure to Argentina and Russia and will face $1.7 billion in special FDIC assessments related to local bank failures in 2023. The company announced that it plans to record costs for the same period.
Taken together, the charges will likely result in a loss of $1 per share in the fourth quarter, Mayo said. Despite being skeptical that the bank will reach its goals, Mayo recommends Citigroup's stock, saying it is in such tatters that it could double within three years. .
The bank's shares fell about 1% in after-hours trading Wednesday.
A Citigroup spokeswoman declined to comment on the bank's guidance change, instead pointing to Mr. Mason's remarks. published Late Wednesday.
“While these items are important to our 2023 results, we remain on track to meet our 2023 expense guidance (excluding FDIC and divestitures) and all medium-term goals,” Mason said. “The items disclosed today do not change our strategy.”
