Citi plunges to giant $18bn loss on back of Trump tax reforms

Citigroup up 2.5% after topping estimates

Citigroup up 2.5% after topping estimates

The New York bank said the more than $18 billion loss in the fourth quarter was related to the new Republican tax law, which lowered the value of assets it has used to offset some of its taxes and also forced it to pay taxes on profits it has held overseas.

The law, signed by President Donald Trump last month, has made fourth-quarter earnings a messy ordeal for big banks. Earnings per share rose to $1.28 per share from $1.14 a year earlier, topping estimates of $1.19 a share.

The bank estimated that its effective tax rate will drop from the "low-30 per cent range" to 25 per cent this year.

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.

Ten dead as clashes shut airport in Libyan capital
The Special Deterrent Force, a militia which controls the airport , was fighting a militia led by rival leader Bashir al-Baqara. Militiamen had attacked the Mitiga airport in an attempt to free colleagues held at a jail there.

CEO Michael Corbat said in a statement that despite the one-time costs from tax reform the new tax plan pointed to a rosier future for Citigroup.

The charge was expected, though its record size was unknown until the New York City-based bank released its fourth-quarter earnings results before USA financial markets opened. The reform "not only leads to higher net income and increased returns, but also serves to strengthen our capital generation capabilities going forward".

Without the one-time charge, Citigroup's quarterly results would have beat analysts' estimates.

Adjusted to exclude the tax items, the bank's net income rose to $3.70 billion from $3.57 billion.

Casino Boat Fire Leaves 1 Dead, More Than A Dozen Injured
Crews helped all 50 passengers make it to shore safety where medics treated them, the news station added. He says the shuttle boat was close to shore when it had engine problems and the crew chose to turn back.

The bank, which has significant operations overseas, also took a $3 billion charge on foreign earnings it will bring back to the United States and pay taxes on.

But banks still see long-term benefits from the tax cuts, while long-term yields have risen more than short-term yields recently, allowing banks to capitalize on the spread.

The company's stock price was up about 1 percent in morning trading to $77 a share.

Citi's Global Consumer Banking business revenue, which covers all retail banking and credit cards, gained 5.6% on the same period twelve months earlier, accounting for almost half of the bank's total revenue, predominantly driven by Asian and Latin American growth which each returned an 11% growth in revenue. Earnings at the institutional-clients group, which houses the investment bank and the global payments business, fell 7 percent to $2.2 billion. Equity markets revenue declined 23 percent, reflecting an episodic loss in derivatives of about $130 million related to a single client event.

Nadal-Federer rematch among 6 storylines to watch at Australian Open
A SERVICE TWEAK: Djokovic has changed his service motion to help address the elbow issues he's had to deal with in the past year. The top seed has a very comfortable draw with only Marin Cilic likely to offer the Spaniard much resistence.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.