Citi plans 20,000 job cuts as it reports worst quarter in 14 years

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Citigroup said it expected to cut 20,000 jobs in the “medium term” as it reported its worst quarter for 15 years.

Citi, which is in the middle of its biggest restructuring for two decades, reported a quarterly loss of $1.8bn after costs from the reorganisation, its retreat from Russia and the devaluation of Argentina’s peso.

Citi announced this week that it would take more than $4bn in charges and expenses during the quarter, including $800mn tied to the bank’s biggest overhaul in years.

The figure also included a $1.7bn “special assessment” from the Federal Deposit Insurance Corporation, linked to last year’s regional bank failures, hundreds of millions of dollars of losses tied to the devaluation of the Argentine currency and more than $500mn in expenses related to the wind-down of the lender’s operations in Russia.

Even excluding one-off charges and expenses, quarterly earnings still fell more than 20 per cent from the fourth quarter of 2022, to more than $1.5bn, though that was better than analysts had expected. Quarterly revenues slipped 3 per cent to $17.4bn. Citi’s full-year earnings dropped 38 per cent from the previous year, to $9.2bn.

The bank did continue to reap some benefit from the unexpectedly resilient US economy, though less than in previous quarters.

Spending on the bank’s credit cards helped lift revenue in its consumer banking division by 12 per cent, while corporate spending helped push up revenue in Citi’s treasury services division, which manages cash and process payments for multinationals, by 6 per cent.

Its investment banking division also performed well, with fees up more than a fifth to almost $1bn, the business’s best result in more than two years.

Revenues from corporate lending dropped 26 per cent, however, as higher interest rates dented demand for borrowing.

A drop in market volatility at the end of the year also hurt the bank’s traders. Revenue from the sales and trading of bonds, commodities and currencies plunged 25 per cent.