Jane
Fraser
CEO,
Citi,
speaks
at
the
2023
Milken
Institute
Global
Conference
in
Beverly
Hills,
California,
May
1,
2023.
Mike
Blake
|
Reuters
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
disclosed
by
the
company’s
CFO
just
weeks
ago.
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
higher
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.
Despite
his
own
skepticism
that
the
bank
can
achieve
its
targets,
Mayo
recommends
Citigroup
stock,
saying
it
is
so
beaten
down
that
it
can
double
within
three
years.
Shares
of
the
bank
dipped
about
1%
in
after
hours
trading
Wednesday.
A
Citigroup
spokeswoman
declined
to
comment
on
the
bank’s
shifting
guidance,
instead
pointing
to
remarks
from
Mason
published
late
Wednesday.
“While
these
items
are
meaningful
for
our
2023
results,
we
remain
on
track
to
meet
the
2023
expense
guidance
(excluding
FDIC
and
divestitures)
and
all
of
our
medium-term
targets,”
Mason
said.
“The
items
we
disclosed
today do
not
change
our
strategy.”
watch
now
