Citigroup Inc reported a 7% decline in fourth-quarter profit on Friday but beat Wall Street expectations, as an improving economic outlook allowed it to release cash it had previously set aside for bad loans, Trend reports with reference to Reuters.
The $900 billion stimulus package passed in December and the incoming Biden administration’s plan to inject $1.9 trillion to support households and small businesses has boosted confidence that banks will be able to ride out the COVID-19 pandemic without widespread losses.
Citi, which named Jane Fraser as chief executive, the first woman CEO for a Wall Street bank, released $1.5 billion from its loan loss reserves, to which it had added more than $10 billion earlier this year.
Overall, the New York-based bank reported profit of $4.63 billion, or $2.08 a share, down from $5 billion, or $2.15 a share, a year earlier. Analysts on average had expected profit of $1.34 per share, according to Refinitiv data.
Outgoing Chief Executive Officer Michael Corbat said the bank intended to resume buybacks in the first quarter on 2021.
Citi’s peer JPMorgan Chase & Co, the first of the major banks to report earnings this season, reported a much better-than-expected quarterly profit earlier in the day, as it too released some of the reserves it had built up against loan losses.