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Citigroup earnings hit 18b year record { January 20 2004 } Original Source Link: (May no longer be active)
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Citigroup earnings hit $18bn full-year record
By David Wells in New York
Published: January 20 2004 13:12 | Last Updated: January 20 2004 13:12
Citigroup, the world's biggest financial services group, on Tuesday underlined the benefits of size and diversity by reporting a 17 per cent jump in annual net income to $17.85bn, a record for a publicly traded company.
Earnings in the fourth quarter almost doubled to $4.76bn, in spite of a $242m charge related to the fraud at Parmalat, the collapsed Italian dairy company.
The record profits come as other big banking groups attempt to copy Citigroup's model by turning themselves into broadly based financial supermarkets. Chuck Prince, who recently took over from Sandy Weill as chief executive, said Citigroup's model had been validated by the planned merger, announced last week, of JP Morgan Chase and Bank One.
"Citigroup's record 2003 performance exemplifies the earnings power of our best-in-class businesses and the strength of our extraordinary model," he said. "We did more, for more clients, in more places than any other financial services company." While this means Citigroup tends to have some exposure to most world financial problems, the impact is usually modest in relation to the group as a whole.
JP Morgan's $58bn deal follows Bank of America's recently agreed $47bn acquisition of FleetBoston, fuelling expectations of a wave of banking mergers. Mr Prince recently said he was not interested in making any "transformative" acquisitions, preferring to focus on the growth of existing businesses and bolt-on deals such as last year's purchase of the Sears credit card operation. On Tuesday, he said he would consider making international acquisitions, but any purchases would be targeted.
Citigroup's global consumer business had income in the fourth quarter of $2.66bn, up 14 per cent. Its global corporate and investment bank made $1.28bn compared with a $326m loss the year before, that included a $1.3bn after-tax charge for regulatory settlements and related civil litigation. Excluding the 2002 contribution from Travelers Property Casualty, which has since been spun off to shareholders, net income from continuing operations rose by a third.
Return on equity for the year was 19.8 per cent. Equity capital and trust preferred securities topped $100bn for the first time and the dividend rose 94 per cent during the year.
Citigroup International, which operates in 95 countries outside the US, increased annual net income by 18 per cent to $4.91bn.
The group's record annual net income topped the $17.72bn Exxon Mobil earned in 2000. But the record may not stand for long. Exxon Mobil, which reports earnings at the end of the month, earned $14.86bn in the first three quarters of 2003.
Wells Fargo and Bank One also reported an improved fourth quarter on Tuesday. Bank One reported net income up 16 per cent at $978m, while Wells Fargo enjoyed a 10 per cent rise in net income to $1.6bn.
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