What happened

The stock market was having a modestly negative day on Friday, with the Dow Jones Industrial Average and S&P 500 both down by less than 1% at 11:10 a.m. EST. However, large-cap bank stock Citigroup (NYSE:C) was a major underperformer, with shares down by 5% for the day.

So what

The short explanation for today's move is that Citigroup just reported its fourth-quarter earnings, and investors don't seem too impressed.

Man looking surprised while using laptop.

Image source: Getty Images.

While Citigroup's earnings surpassed analyst expectations, it was due to an unexpected $1.5 billion reserve release more than the bank's actual business performance. On the top line, revenue dropped by 10% from the fourth quarter of 2019.

However, the news wasn't all bad. Citigroup's book value per share grew 4% year over year. The bank's deposits grew by 20% from the same time last year, as Americans saved money at historically high rates during the pandemic. Retail loans grew by 4% year over year, and Citi's credit card business saw purchase volume rise 12% from the third quarter, indicating a nice rebound in consumer spending.

On the investment banking side, trading revenue (which has been a strong point throughout the pandemic) was up 13% year over year. However, investment banking revenue declined by 5% due to lower mergers and acquisitions advisor revenue and a slowdown in debt underwriting.

Now what

To sum it up, Citigroup had a good, but not great fourth quarter. And it's also worth pointing out that even after today's drop, shares of the bank are up by nearly 60% from the beginning of November, so I wouldn't be too concerned about the relatively slight pullback.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.