Post Earnings Coverage as Citigroup's Q4 Bottom-line Beat Expectations
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Upcoming AWS Coverage on Renasant Post-Earnings Results
LONDON, UK / ACCESSWIRE / January 23, 2017 / Active Wall St. announces its post-earnings coverage on Citigroup Inc. (NYSE: C). The Company announced its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on January 18, 2017. The New York-based bank's quarterly diluted EPS grew 12% y-o-y, outperforming analysts' consensus estimates. Register with us now for your free membership at:
One of Citigroup's competitors within the Money Center Banks space, Renasant Corp. (NASDAQ: RNST), announced on January 17, 2017, its Q4 2016 and year-end results. AWS will be initiating a research report on Renasant in the coming days.
Today, AWS is promoting its earnings coverage on C; touching on RNST. Get our free coverage by signing up to:
In the reported quarter, Citigroup's total revenues were down by 8% on a y-o-y basis to $17.01 billion from $18.46 billion in Q4 FY15. Quarterly revenues also fell short of Wall Street's consensus of $17.05 billion. Furthermore, Citigroup's revenues, excluding the impact of foreign exchange translation, decreased 7% y-o-y driven by a 79% decrease in Citi Holdings' revenues, but partially offset by an 8% growth in Citicorp's revenues.
The global bank reported net income of $3.57 billion, or $1.14 per diluted share, in Q4 FY16 versus $3.34 billion, or $1.02 per diluted share, in Q4 FY15. Wall Street had expected net income of $1.12 per diluted share. Additionally, adjusted net income to common shareholders in the reported quarter stood at $3.25 billion compared to $3.18 billion in Q4 FY15.
For full year FY16, the Company's revenue stood at $69.88 billion, down 8% from $76.35 billion in FY15. The Company's net income also fell during FY16 to $14.91 billion, or $4.72 per diluted share, from $17.24 billion, or $5.40 per diluted share, in FY15.
Performance Metrics
For the reported quarter, the bank's return on average assets came in at 0.78% compared to 0.74% in the prior year's comparable quarter. The return on average common equity stood at 6.2% in Q4 FY16 versus 5.9% reported in the year ago same period.
Citigroup's net interest revenue as a percentage of average interest-earning assets (NIM) for the reported quarter was down by 13 basis points to 2.79% in Q4 FY16 from 2.92% in Q4 FY15. However, average interest earning assets rose to $1.61 trillion in Q4 FY16 from $1.57 trillion in the previous year's comparable quarter.
As on December 31, 2016, the bank's Common Equity Tier 1 ratio stood at 12.5% compared to 12.07% as at end of the previous year's last quarter. During Q4 FY16, supplementary leverage ratio improved to 7.2% from 7.08% in the year ago same quarter. Furthermore, tangible book value per share improved from $64.57 in Q4 FY16 from $60.61 per share in Q4 FY15.
Segment Performance
In the three months ended on December 31, 2016, Global Consumer Banking (GCB) segment's revenues improved 2% y-o-y to $8.03 billion. Meanwhile, on constant dollars, revenues grew 5% y-o-y driven by a 5% y-o-y rise in both North American and international revenues. However, GCB segment's net income fell 7% y-o-y to $1.27 billion, primarily due to higher cost of credit.
Institutional Clients Group's revenues rose 11% y-o-y in Q4 FY16 to $8.34 billion as the segment reported an 25% y-o-y surge in Markets and Securities Services' revenues. Additionally, the segment's adjusted net income came in at $2.47 billion, increasing 80% y-o-y, primarily attributed to higher revenues, lower cost of credit, and lower operating expenses.
Due to absence of net gains from asset sales, Citi Holdings segment's revenues plunged 79% y-o-y in Q4 FY16 to stand at $657 million. Adjusted net income also declined to $87 million in Q4 FY16 from $667 million in the prior year's same period as the segment suffered from lower revenue, and was partially offset by lower operating expenses and lower cost of credit.
Geographical Contribution
Citicorp's North American revenues for the reported period were $8.13 billion compared to $7.65 billion in the year ago corresponding period. The region contributed $1.76 billion to the Company's income from continuing operations in Q4 FY15 compared to $1.51 billion in Q4 FY15.
Asian revenues grew to $3.36 billion in Q4 FY16 from $3.26 billion the previous year comparable quarter. The region's contribution to Citicorp's income from continuing operations also improved to $798 million in Q4 FY16 from $658 million in Q4 FY15.
In Q4 FY16, Latin American revenues came in at $2.23 billion versus $2.33 billion in the last year's same quarter. Income from continuing operations was $514 million in Q4 FY16, compared to $342 million Q4 FY15.
Additionally, Europe, Middle East, and African (Institutional Clients Group only) revenues stood at $2.65 billion, which came in above $2.13 billion reported the year ago comparable quarter. The regions contribution to Citicorp's income from continuing operations surged to $677 million in Q4 FY16 from $231 million in Q4 FY15.
Stock Performance
On Friday, January 20, 2017, the stock closed the trading session at $56.11, slightly falling 0.97% from its previous closing price of $56.66. A total volume of 27.71 million shares have exchanged hands, which was higher than the 3-month average volume of 21.65 million shares. Citigroup's stock price advanced 13.77% in the last three months, 28.03% in the past six months, and 41.04% in the previous twelve months. The stock is trading at a PE ratio of 12.10 and has a dividend yield of 1.14%.
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