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Citi Reports That It’s Still Way Too Big To Worry About A Massive Trading Loss

Mike Corbat: “I got creamed by that December volatility…come at me, bro.”

It’s earnings season, baby! And with all the big banks reporting this week, the markets are chugging Pepto and hoping that they remembered to price-in the December volatility shitshow.

The first major lender to see how well-prepared we are for the inevitable disappointment that will be Q4 of 2018 is Citi, because what bank is a better barometer of normal behavior than the opaquely enormous financial services company run by a man so vanilla and forgettable that we’re pretty sure he paid a witch to make him that way so he may one day rule us all?

So, how did Citi do?

Citigroup Inc reported a surprise drop in quarterly revenue on Monday, as extreme volatility in financial markets toward the end of the year hurt its fixed-income trading business.
Revenue from that business fell 21 percent in the fourth quarter, with Citigroup citing widening credit spreads and the market correction in December.

Ruh roh. That’s a lot of money to lose. How does a bank come back from that?…

Excluding a one-time tax related gain, quarterly profit rose to $4.2 billion, or $1.61 a share, in the quarter ended Dec. 31, from $3.7 billion, or $1.28 a share, a year earlier.
Analysts had expected a profit of $1.55 per share, according to IBES data from Refinitiv.

Oh, right…Citi remains so comically massive that it can weather a critical loss in revenue by simply cutting back on a few items and also doing, like, one other thing…

Citigroup’s costs fell 4 percent, with the bulk of the declines coming from a unit that is still shedding assets left over from the 2007-2009 financial crisis.
Earnings per share were also boosted by an 8 percent decline in outstanding stock as Citigroup bought back 74 million of its own shares.

Here’s what Citi looks like at 11:30am EST

Screen Shot 2019-01-14 at 11.29.38 AM

So, if Citi is a [mutant giant] canary in the Q4 coal mine, we can assess that December fucked everybody up, but not too badly if you’re a multi-billion megabank that can use tax cuts to buy back your own shares whilst finally getting around to getting smaller more than a decade after the financial crisis.

You in trouble, Goldman Sachs.

Citigroup reports surprise drop in quarterly revenue, shares fall [Reuters]



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