Fourth-quarter results weren't all that exciting. Net revenue climbed all of 3%, and income from continuing operations was down 3% from the year-ago level. In short, it was all the consumer's fault. Corporate and investment banking did quite well -- revenue up 14% and net income up 21% -- and while neither wealth management nor alternative investments made a major positive contribution in absolute dollars, they did both post improved results.
But, oh, that consumer business. This unit contributes more than half of the firm's revenue, but revenue here was down 3%. Net income was even worse, falling 23%. The problems were in the U.S. business (the international business posted revenue and income gains), as higher credit losses from personal bankruptcies and the absence of year-ago helpers like released loss reserves and tax benefits nailed the segment's earnings.
I don't see the troubles in the fourth quarter as a sign of long-term weakness. In fact, I think Citigroup has a respectable franchise in consumer financial services. That's not to say, though, that there isn't substantial room for improvement across the board in the U.S. consumer operations.
I've been positive on Citigroup for a little while now, and I still like this stock. That's not to say there aren't plenty of other good ideas out there. There are other global banks worth checking out (say, Motley Fool Inside Value pick Lloyds
Still, Citigroup would seem to have an attractive valuation compared to that mixed group, and today's announcement of an 11% increase in the dividend isn't bad news, either. For investors looking for all-around worldwide play on both consumer and corporate finance, Citigroup is still at least worth the time for due diligence.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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