Citigroup reports $18 billion loss on one-time tax items

Citigroup reports $18 billion loss on one-time tax items

Net income rose by four per cent for the quarter year-on-year on an adjusted basis, although revenues in Europe, the Middle East and Africa fell by eight per cent, offsetting stronger performances in Latin America and Asia. The tax charge comes largely from write-downs of the bank's deferred-tax assets.

The latest quarter's results include an estimated one-time, non-cash charge of $22 billion, or $8.43 per share, related to the enactment of the Tax Cuts and Jobs Act, or the US tax reform.

President Donald Trump's tax reforms have pushed U.S. banking giant Citi to a vast $18.3bn (£13.3bn) loss in the fourth quarter of a year ago.

However, banks and other large USA corporations expect to benefit greatly from lower taxes and other provisions in the new law over the long term.

The new U.S. tax law is a window into the reality of corporate tax law.

Citi said its Tax Rate for 2018 is expected to be approximately 25%, which is higher than rivals 19% due to its larger portion of worldwide operations, but still significantly lower than 2017's rate.

Citigroup Inc shares rose $2.34 (+3.05%) in premarket trading Tuesday.

Airbus says to scrap A380 programme if no new orders
Passenger traffic is doubling every 15 years, he said, meaning that the original rationale for the model still holds. However, Mr Leahy added that he is still hopeful that a deal with Emirates could be worked out.

Revenue came in roughly in line with expectations at $17.255 billion. The bank also said its equity trading division was hurt by $130 million related to a "single client event".

The changes will not only boost Citigroup's profits, but allow the bank to generate higher returns and generate more capital, Chief Executive Michael Corbat said.

Revenues rose 1.4% from previous year to $17.25 billion, also edging out analysts' view for $17.23 billion. A tax credit for deferred losses was reduced by $19bn for Citi, while it took another $3bn hit on profits held overseas, a key target of the Trump administration.

"Tax reform is a clear net positive for Citi and its shareholders", Corbat said on a conference call with analysts.

The huge tax charges overshadowed what was an otherwise largely unremarkable batch of quarterly results.

In reports on Tuesday morning, several analysts said Citi's results were modestly ahead of Wall Street's best guess and that they were more focused on whether the bank would lift performance targets.

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