Banking
JPMorgan Chase reports record annual profit as earnings season begins
Fri Jan 12, 2024 4:25 p.m. GMT
Citigroup will cut 20,000 jobs by the end of 2026 after suffering a steep loss last quarter as it pushes ahead with a major restructuring.
Wall Street bank bosses are warning Congress that new rules could harm the US economy
While Chief Executive Jane Fraser hailed 2024 as a “turning point” for the American banking group, the bank's chief financial officer Mark Mason admitted the job cuts would be “hard on morale” as he outlined the planned cuts.
Citi currently employs 239,000 people worldwide. The lender plans to reduce that amount by 20,000 as part of a restructuring, Mason said.
Ultimately, executives expect the workforce to shrink to about 180,000 employees as the upcoming listing of Banamex, Citi's Mexican consumer unit, will also result in a headcount reduction of about 40,000 employees.
As Wall Street's latest earnings season began Friday, Citi posted a fourth-quarter loss of $1.8 billion after a series of one-time charges and expenses – totaling $3.8 billion – related to the Restructuring and withdrawal of the company were recorded in Russia and involvement in Argentina.
“While the fourth quarter was very disappointing due to the impact of notable items, we made significant progress in simplifying Citi and executing our strategy in 2023,” Fraser said.
Shares of Citi, the third-largest bank in the U.S., rose 0.4% in early trading in New York. The lender, which has a market valuation of $100 billion, is in the midst of a push to boost profits, cut red tape and boost its stock price.
This came as JPMorgan Chase, America's third-largest bank, reported its best annual profit ever despite a charge last quarter to replenish a U.S. government deposit insurance fund after several regional lenders, including Silicon Valley Bank, collapsed. last year.
JPMorgan's fourth-quarter profit fell 15% to $9.31 billion. However, profits rose 32% for the year to $49.6 billion. The lender benefited from higher interest rates and its acquisition of First Republic, one of the regional banks that failed last year.
JPMorgan raised analysts' expectations for net interest income – the gap between what the company earns on loans and what it pays out on deposits – and forecast the measure will reach $90 billion this year.
“The U.S. economy remains resilient, consumers continue to spend, and markets are currently expecting a soft landing,” JPMorgan Chairman and CEO Jamie Dimon said as inflation eases.
However, there are still “a number of downside risks,” Dimon warned. “While we hope for the best, the past year has shown why we must be prepared for any environment.”
JPMorgan shares rose 0.6% on Friday.
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