10-KPeriod: FY2023

CITIGROUP INC Annual Report, Year Ended Dec 31, 2023

Filed February 23, 2024For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported a net income of $9.2 billion for the fiscal year 2023, a decrease from $14.8 billion in 2022, primarily due to higher operating expenses, increased cost of credit, and a higher effective tax rate. Revenues saw a modest 4% increase to $78.5 billion, driven by higher net interest income from increased rates and loan growth in U.S. Personal Banking, though this was partially offset by lower non-interest revenues in Markets and Banking segments. The company incurred significant "notable items" in the fourth quarter, including a $1.7 billion charge for the FDIC special assessment and $780 million in restructuring charges related to organizational simplification, impacting overall profitability. Despite these headwinds, Citigroup's Common Equity Tier 1 (CET1) capital ratio improved to 13.4% under the Basel III Standardized Approach, comfortably exceeding regulatory requirements. The company returned $6.1 billion to shareholders through dividends ($4.1 billion) and share repurchases ($2.0 billion), while continuing its strategy to exit certain international consumer banking businesses and simplify its operating model.

Financial Highlights

38 data points
Beta

Revenue

$78.07B

Net Income

$9.23B

11.8% Net Margin

EPS (Diluted)

$4.04

Total Assets

$2.41T

Cash & Equivalents

$260.93B

Free Cash Flow

-$80.00B

Financial Statements
Beta
Revenue$78.07B
Operating Income$9.23B
Interest Expense$78.36B
Net Income$9.23B
EPS (Basic)$4.07
EPS (Diluted)$4.04
Shares Outstanding (Basic)1.93B
Shares Outstanding (Diluted)1.96B

Key Highlights

  • 1Net income decreased by 38% year-over-year to $9.2 billion, impacted by significant one-time charges.
  • 2Total revenues increased by 4% to $78.5 billion, driven by higher net interest income.
  • 3Operating expenses increased by 10% to $56.4 billion, including $1.7 billion for the FDIC special assessment and $780 million in restructuring charges.
  • 4Cost of credit significantly increased to $9.2 billion from $5.2 billion, largely due to higher credit card net losses and reserve builds related to Russia and Argentina.
  • 5Common Equity Tier 1 (CET1) capital ratio improved to 13.4% (Standardized Approach) as of year-end 2023, reflecting strong capital generation and capital actions.
  • 6Returned $6.1 billion to common shareholders through dividends ($4.1 billion) and share repurchases ($2.0 billion).
  • 7Continued progress in exiting international consumer businesses and simplifying the organizational structure.

Frequently Asked Questions

Net income decreased by 38% to $9.2 billion in 2023 compared to $14.8 billion in 2022. This was primarily driven by a 10% increase in operating expenses ($56.4 billion), largely due to a $1.7 billion FDIC special assessment and $780 million in restructuring charges, as well as a significant increase in the cost of credit, which rose to $9.2 billion from $5.2 billion due to higher net credit losses in U.S. Personal Banking and reserve builds related to exposures in Russia and Argentina. A higher effective tax rate also contributed to the decline.

Citigroup's capital position remained strong. The Common Equity Tier 1 (CET1) capital ratio under the Basel III Standardized Approach increased to 13.4% as of December 31, 2023, up from 13.0% at the end of 2022. This ratio comfortably exceeded the required regulatory minimum of 12.3% (including buffers), indicating a solid capital base.

Citigroup made significant progress in its multiyear transformation and simplification initiatives. In 2023, the company closed the sales of four remaining signed consumer banking businesses and continued to make progress with wind-downs of other businesses in markets like Korea, China, and Russia. They also restarted the sales process for their Poland consumer banking business and progressed with the planned IPO of their Mexico consumer banking and middle-market banking operations.

Services revenue grew 16% driven by net interest income, though net income declined 5% due to higher expenses and cost of credit. Markets revenue decreased 6% impacting net income by 33%, driven by lower trading revenues and higher expenses. Banking reported a net loss of $48 million, a significant decrease from $386 million net income, due to lower revenues and higher expenses, including a loss on loan hedges. U.S. Personal Banking saw revenue growth of 14% but a 34% decline in net income, primarily due to higher cost of credit and expenses. Wealth segment revenues decreased 5%, leading to a 64% drop in net income, mainly due to lower revenues and higher expenses.