Citi 4Q profit misses forecasts
NEW YORK (AP) - Citigroup's fourth-quarter profit fell short of analysts' expectations as its bond and mortgage businesses weakened.
The bank said Thursday it earned $2.60 billion, after stripping out the effects of an accounting charge. Per share, that amounted to 82 cents, falling short of the 95 cents that analysts expected.
Citi's stock fell nearly 4 percent in late morning trading.
Revenue, excluding adjustments, slipped 2 percent to $17.9 billion, short of the $18.2 billion Wall Street predicted.
Still, the bank's adjusted net income for the quarter was up 21 percent from a year earlier.
"Although we didn't finish the year as strongly as we would have liked, we made substantial progress toward our key priorities in 2013," said Michael Corbat, Citigroup's CEO said in a statement.
Like rivals JP Morgan, Bank of America and Wells Fargo, who reported earlier this week, Citigroup's home loan business has been hurt by rising interest rates. The three other banks reported double-digit declines in their mortgage operations for the fourth quarter. All three expect a further slowdown this year.
SLOWER MORTGAGE BUSINESS: Citi saw its own mortgage business decline as refinancing slowed. Revenue at the bank's consumer division fell 5 percent to $9.47 billion. Over the summer, mortgage rates started to rise, stopping many consumers from refinancing their home loans.
BOND DRAG: Revenue at Citi's bond business also slumped, dropping 15 percent to $2.33 billion. Much of the decline was due to a drop in demand for the bank's structured credit products, said John Gerspach, Citi's chief financial officer.
BRIGHT SPOTS: Citi's operating costs fell 6 percent to $11.9 billion in the period. Revenues at Citi's investment banking unit also improved, driven by more mergers and acquisition business. Its equity business also improved.
STOCK REACTION: Citi's stock price fell $2.39, or 4.3 percent, to close at $52.60.
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