Citigroup reports 26% drop in quarterly profit due to higher expenses, weaker consumer banking revenue

Citigroup Inc’s (C) fourth-quarter profit, reported on Friday, shrank at an annual rate of 26%, since the Wall Street bank took a hit from higher expenditures and weaker performance at its consumer banking division.

The bank’s earnings dropped to $3.2 billion ($1.46 per share) during the quarter ended on December 31st from $4.3 billion ($1.92 per share) in the year-ago quarter.

Lower earnings came as a result of an 8% increase in the group’s operating expenses, excluding the impact of divestitures across Asia.

In October, the bank had announced that it would exit retail banking operations in South Korea, while last Friday it said it had agreed to sell its consumer businesses in Indonesia, Malaysia, Thailand and Vietnam to Singapore-based United Overseas Bank.

Excluding the impact of expenses related with Asia divestitures, the Wall Street bank earned $1.99 per share. In comparison, a consensus of analyst estimates had pointed to earnings of $1.38 per share.

Citi’s total revenue was reported to have risen 1% year-on-year to $17 billion during the quarter.

Citigroup’s global consumer banking revenue went down 6% year-on-year, as it was affected by a 3% drop in revenue from Citi-branded credit cards in North America.

Revenue at Citi’s Treasury and Trade Solutions unit shrank 1% year-on-year during the quarter because of low interest rates.

On the other hand, revenue at the group’s investment banking division rose 43% year-on-year.