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Why Citigroup Stock Lost 20% in December

By Demitri Kalogeropoulos - Updated Apr 16, 2019 at 8:09PM

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Investor fears spiked about worsening profitability trends for this banking giant.

What happened

Citigroup (C 3.26%) trailed the market last month by shedding 20% compared to a 9% drop in the S&P 500, according to data provided by S&P Global Market Intelligence.

The move contributed to significant losses overall for the year, with Citigroup shares losing 30% compared to a 6% slump in the broader market.

A person signs paperwork as man in a suit looks on.

Image source: Getty Images.

So what

Like its peer financial giants, Citigroup stock was hit last month by rising investor concerns about a global growth slowdown. However, shares fell a bit faster following comments by the management team suggesting that the bank might not reach its 2018 fiscal targets. Unfavorable interest rate moves, plus slowing demand for debt and equity issuances, could crimp its investment banking revenue, CFO John Gerspach said in an investor presentation.  

Now what

Gerspach and his team will have much more to say about Citigroup's actual results when the company announces fourth-quarter earnings numbers on Monday, Jan. 14. Most investors who follow the stock are expecting to see revenue rise about 4% to just under $18 billion while earnings improve to $1.61 per share from $1.28 per share a year ago.

However, the stock's trajectory will likely depend on trends like deposit growth and metrics like operating efficiency -- and on Citigroup's initial comments about how interest rate moves will impact the business in 2019.

Check out the latest Citigroup earnings call transcript.

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