01—Abstract
Summary
Summary of the 10-K filed February 27, 2023. Cited figures are marked; the original filing is the authoritative source.
Citigroup Inc. reported a net income of $14.8 billiona, or $7.00 per diluted share, for the year ended December 31, 2022.
This represents a decrease compared to the prior year's net income of $22.0 billionb, or $10.14 per diluted share, primarily driven by higher cost of credit and increased operating expenses, partially offset by higher revenues. Despite the decrease in net income, the company demonstrated progress in its consumer banking divestitures, completing sales in five exit markets and working towards additional transactions. Furthermore, Citigroup maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio increasing to 13.0% as of December 31, 2022, exceeding regulatory requirements.
Key business segments like Institutional Clients Group (ICG) saw revenue growth, though Banking revenues declined. Personal Banking and Wealth Management (PBWM) revenues increased due to higher net interest income, but net income decreased significantly due to provisions for credit losses. Looking ahead, Citigroup anticipates higher expenses in 2023 driven by ongoing transformation investments, volume-related expenses, and inflation, alongside expectations for higher net credit losses, particularly in the cards business.
02—Key points
Key Highlights
- Net income decreased to $14.8 billion ($7.00/share) in 2022 from $22.0 billion ($10.14/share) in 2021, impacted by higher credit costs and operating expenses.
- Total revenues increased 5% to $75.3 billion, driven by higher net interest income and gains on consumer banking business divestitures.
- Operating expenses increased 6% to $51.3 billion, reflecting investments in transformation, business growth, and risk and control initiatives, partially offset by productivity savings and divestitures.
- Cost of credit increased to $5.2 billion in 2022, compared to a benefit of $3.8 billion in 2021, primarily due to a net build in the allowance for credit losses.
- Common Equity Tier 1 (CET1) capital ratio improved to 13.0% from 12.2% at year-end 2021.
- Returned $7.3 billion to common shareholders in 2022 through dividends ($4.0 billion) and share repurchases ($3.3 billion).
- Continued progress on consumer banking business divestitures, closing sales in five exit markets.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 27, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $75.34B$71.88B | +4.8% |
| Operating Income | $15.08B$21.95B | −31.3% |
| Interest Expense | $25.74B$7.98B | +222.5% |
| Net Income | $14.85B$21.95B | −32.4% |
| EPS (Basic) | $7.04$10.21 | −31.0% |
| EPS (Diluted) | $7.00$10.14 | −31.0% |
| Shares Outstanding (Basic) | 1.95B2.03B | −4.2% |
| Shares Outstanding (Diluted) | 1.96B2.05B | −4.2% |
05—Questions
Frequently Asked Questions
What was Citigroup's financial performance in 2022?
In 2022, Citigroup reported a net income of $14.8 billion, or $7.00 per diluted share, a decrease from $22.0 billion, or $10.14 per diluted share, in 2021. Total revenues increased by 5% to $75.3 billion, primarily due to higher net interest income and gains from consumer banking business divestitures. However, operating expenses rose by 6% to $51.3 billion, driven by investments in transformation and risk management, and the cost of credit increased significantly to $5.2 billion from a benefit of $3.8 billion in the prior year.
How did Citigroup's capital position fare in 2022?
Citigroup's capital position remained strong. The Common Equity Tier 1 (CET1) capital ratio improved to 13.0% as of December 31, 2022, up from 12.2% at the end of 2021. This increase reflects net income and benefits from consumer banking business sales and risk-weighted asset reduction actions. The company returned $7.3 billion to common shareholders in 2022 through dividends and share repurchases.
What were the key drivers of the change in net income compared to the previous year?
The decrease in net income from $22.0 billion in 2021 to $14.8 billion in 2022 was primarily driven by two main factors: a significantly higher cost of credit, largely due to a net build in the allowance for credit losses, and higher operating expenses. These were partially offset by an increase in revenues.
What is the status of Citigroup's consumer banking divestitures?
Citigroup made substantial progress on its consumer banking divestitures in 2022. The company closed sales in five exit markets (Australia, Philippines, Thailand, Malaysia, and Bahrain) and is working towards closing four additional sale transactions. Additionally, Citigroup is progressing with the wind-down of its consumer banking operations in Korea and Russia.
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