Posted on 01/11/2024 3:38:27 PM PST by george76
Citigroup warned investors late Wednesday that charges tied to the decline of the Argentine peso as well as the bank’s reorganization came in far higher than recently disclosed.
The bank said its fourth-quarter results, scheduled to be released Friday morning, were impacted by $880 million in currency conversion losses from the peso and $780 million in restructuring charges tied to CEO Jane Fraser’s corporate simplification project.
Those charges are significantly larger than the “couple hundred million dollars” apiece that CFO Mark Mason told investors to expect at a Dec. 6 conference hosted by Goldman Sachs.
...
They gave guidance just a month ago, and now its several hundred million dollars higher for two categories,” veteran banking analyst Mike Mayo of Wells Fargo said in a phone interview. “If your problem is credibility with investors, then you shouldn’t be doing this type of thing.”
Fraser faces a key moment this week as Citigroup reports fourth-quarter and full-year 2023 earnings in the middle of restructuring efforts aimed at making the bank into a leaner, more profitable company. Throughout the past two decades, Citigroup has been dogged by high expenses and eroding credibility after Fraser’s predecessors underdelivered on targets. That’s left Citigroup the lowest valued among the six biggest U.S. banks.
Beyond the two charges, Citigroup disclosed Wednesday that it needed to build reserves by $1.3 billion because of its exposure to Argentina and Russia, and that it would post a $1.7 billion expense for a special FDIC assessment tied to the 2023 regional bank failures.
All told, the charges are likely to result in a $1 per share fourth-quarter loss, according to Mayo.
(Excerpt) Read more at cnbc.com ...
“unexpected”
I would be worth a loss if they could get rid of their armies of middle managers, the ones who think that the more employees they have in their department, the bigger their paycheck should be.
However, the question remains - will they manage to do this correctly, or screw it up like everything else they’ve tried?
Just a Pre bailout announcement
Nothing to read here
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