Citigroup said on Wednesday it set aside $1.3 billion in the fourth quarter to account for risks in Argentina and Russia, citing shocks to the two countries' economies, and said it booked other charges related to its own regulatory reform and payments arising from last year's crisis. Bank failure.
This disclosure came from the bank, in a filing submitted to the Securities and Exchange Commission, as it prepares to report its fourth-quarter results on Friday, while Argentina is subject to harsh austerity measures and Russia is dealing with the repercussions of its war in Ukraine.
The bank remains “on track” to meet 2023 expense projections, Chief Financial Officer Mark Mason said in a blog post discussing the disclosure.
He said: “The items we revealed today do not change our strategy.”
However, Citigroup C shares,
It fell 1.6% after hours on Wednesday.
Citigroup said the $1.3 billion in reserves, which impacted its fourth-quarter pre-tax results, were “driven by safety and soundness considerations under US banking law.”
The report pointed to “cross-border and cross-currency exposures” in Argentina, and concerns about the country’s ability to handle its debt. The bank also noted “prolonged political and economic instability” in Russia.
Argentina's government, under its new right-wing populist president, Javier Miley, has announced plans to devalue its currency by 50%, cut a variety of services, and allow the privatization of some state-run companies, the country has announced. Dealing with rampant inflation and unemployment. These moves were met with protests.
Citigroup said it suffered a loss of nearly $880 million in revenue in Argentina after the peso depreciated there.
Citigroup said in the filing that it also recorded a $1.7 billion charge on operating expenses in the quarter related to a special assessment from the Federal Deposit Insurance Corporation, under which the FDIC will raise money to cover uninsured deposits lost after the collapse. From Silicon Valley Bank and others last year.
Citigroup also said it booked about $780 million in restructuring charges in the fourth quarter, driven by things like severances.
Under CEO Jane Fraser, Citigroup has cut jobs and gotten rid of some overseas operations. Fraser tried to redouble his efforts in the bank's core business.
