Citigroup Posts Big Loss on New Tax Law -- Earnings Review

Citigroup Inc.'s (C) fourth-quarter profit was erased by a giant one-time charge related to the new tax law.

Here's what you need to know.

EARNINGS: Citigroup posted a loss of $18.3 billion, or $7.15 a share, its largest ever quarterly deficit, with the $22 billion charge also leading to a loss for the year. The company said the tax law would lead to higher profit and increased returns in the future. The tax charge comes largely from write-downs of the bank's deferred-tax assets.

Without the charge, the bank earned $1.28 a share for the quarter, above the $1.19 expected by analysts as polled by Thomson Reuters.

SHARES RISE: Shares of Citigroup rose 2.6% in premarket trading to $78.80.

LOANS INCREASE: Total loans for the bank grew 7% to $667 billion from a year prior. Citigroup increase its allowance for bad loans to $12.4 billion from $12.1 billion previously, though the closely-watched metric fell as a percentage of total loans. Loans that the bank considers to have doubtful repayment potential, also known as non-accrual loans, declined 17% to $4.8 billion, with consumer non-accrual loans declining 15% and corporate non-accrual loans declining 20%.

REVENUE RISES: Revenue at the bank rose 1% to $17.26 billion, above the $17.22 billion that analysts were expecting.

LESS TUMULT AND LESS TRADING: Trading revenue fell 19% to $2.9 billion from $3.6 billion a year ago, hurt by declines in both fixed-income and equities trading. Political surprises in late 2016, most notably, the election of Donald Trump, stirred up volatility and made for trading booms. The bank also said its equity trading division was hurt by $130 million related to a "single client event." JPMorgan Chase & Co. (JPM) on Friday disclosed a loss of $143 million on a "margin loan to a single client" in its results, which was linked to troubles at Steinhoff International Holdings NV (SNH.JO), a South African company facing an accounting scandal.

CREDIT-CARD BILL: Citigroup has been investing heavily in its credit-card unit, including with new rewards programs and marketing. The bank is facing questions from investors who want to know when that will start paying off. Revenue from Citigroup-branded cards in North America increased 1% over the year to $2.2 billion even as the company said it saw higher related costs.

Write to Austen Hufford at austen.hufford@wsj.com and Christina Rexrode at christina.rexrode@wsj.com

(END) Dow Jones Newswires

January 16, 2018 09:37 ET (14:37 GMT)