Business

Citigroup profits jump after fall in legal costs

Citigroup hq Image copyright Reuters

US bank Citigroup has reported a jump in fourth quarter profits compared with a year earlier, helped by a big fall in legal costs.

The bank said net profit rose to $3.34bn (£2.43bn) compared with $344m in the last quarter of 2014 when it paid $3.5bn in legal and other charges.

The bank's legal and repositioning costs fell to $724m for this quarter.

Citi - which is undergoing a restructuring - is the third largest US bank when ranked by assets.

The picture at Citi echoed that at JP Morgan Chase, which reported results on Thursday. Profits there also jumped thanks to lower legal expenses and better cost control.

'Safer and stronger'

Citigroup has been restructuring to focus on more profitable businesses and markets, and has closed consumer operations in 11 overseas markets.

Operating expenses fell 23% to $11bn, partly thanks to the fall in legal-related costs.

Chief executive, Michael Corbat, said: "We have undoubtedly become a simpler, smaller, safer and stronger institution.

"We have sharpened our focus on target clients, shedding over 20 consumer and institutional businesses in the process."

Citi's shares were down 5% in early trading on Wall Street.

The US's biggest mortgage lender, Wells Fargo, also released results on Friday.

It reported a 0.8% fall in profits for the final quarter of 2015 to $5.34bn after it set aside more to cover bad loans.

However, mortgage banking revenue rose 9.6% to $1.66bn, the first quarterly rise all year.

Its shares were 2.5% lower in early trading.

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