Citigroup (C) is undergoing a convoluted reorganization. It made it apparent on Wednesday that Friday’s fourth-quarter earnings announcement will also be intricate.
The massive New York-based bank stated in a regulatory filing that its fourth-quarter results will include one-time reserves and expenses totalling more than $3 billion.
These range from $780 million in charges for severance costs and other parts of a broad restructuring of the bank headed by CEO Jane Fraser, to a $1.3 billion reserve build for currency risk in Argentina and Russia.
A charge of $1.7 billion will also be reported to the Federal Deposit Insurance Corporation in order to pay a special assessment.
Similar FDIC assessments, which were used to offset the $18 billion in losses to the FDIC’s insurance fund following the bankruptcies of Silicon Valley Bank and Signature Bank last March, may also put pressure on other large banks.
This sum was originally projected by Citigroup to be $1.65 billion.
The whole fourth quarter results were not disclosed in the disclosures made on Wednesday, so it is unclear how large of a hit these charges and expenses will have on the bank’s bottom line. Following the release, its stock dropped more than 1% in after-hours trade.
Citigroup’s CFO, Mark Mason, stated in a blog post that “the items we disclosed today do not change our strategy.”
“Although we rarely share information about the quarter’s results ahead of planned earnings announcement dates, we felt this was a prudent step in our commitment to building credibility and being transparent,” the speaker continued.
Citigroup is reducing its goals in an effort to boost its stock price and get rid of decades’ worth of excess. Fraser is attempting to streamline operations, cut out non-profitable items, and concentrate the business on servicing large, international corporations.
She is planning to leave 14 consumer franchises in Asia, Europe, the Middle East, Africa, and Mexico, as well as withdrawing from consumer banking globally and the municipal bond sector.
As part of an internal restructuring that Fraser has referred to as the “most consequential” overhaul to Citigroup’s operations in almost two decades, she is also eliminating jobs and reorganizing business lines.
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