Citi recorded $1.3B reserve build in Q4

In a regulatory filing, Citigroup stated that in the fourth quarter of 2023 pretax results for Citi were impacted by the following new discrete item: Citi recorded a $1.3B reserve build in the quarter related to increases in transfer risk associated with exposures outside the U.S., driven by safety and soundness considerations under U.S. banking law; more specifically, cross-border and cross-currency exposures in Argentina (720M), based on prevailing economic trends, currency devaluation and geopolitical risk that may impact Argentina’s ability to sustain external debt service, and in Russia (580M) for the prolonged political and economic instability. The filing also states: “In addition, Citi’s fourth quarter of 2023 pretax results were impacted by the following items previously discussed by Citi, but which have now been finalized, and are being disclosed for transparency purposes: Citi recorded an approximate $1.7B charge to operating expenses in the quarter (previously estimated to be up to $1.5B in Citi’s 3Q23 Form 10-Q, and subsequently estimated to be approximately $1.65B during a recent Citi investor presentation) related to the Federal Deposit Insurance Corporation special assessment… Citi recorded an approximate $880M translation loss in revenues in Argentina in the quarter, as a result of the recent devaluation of the Argentine peso. This decrease in revenues impacted Services, Markets and Banking… Citi also generated net interest income of approximately $250 million on its net investments in Argentina in the fourth quarter of 2023, which is not included above… Citi recorded approximately $780M in restructuring charges in the quarter, largely driven by severance, non-cash asset impairments and other related charges, as part of Citi’s implementation of its organizational and management simplification initiatives as of year-end 2023… These items will be reflected in Citi’s fourth quarter and full-year 2023 earnings materials to be released on January 12, 2024.”