The data comes from a preview of the American banking giant’s fourth quarter and full year 2023 earnings report, which will be published on January 12.
Citigroup, the American banking giant, presented this Wednesday what would be the prelude to its earnings report for the last quarter of 2023, which will be released next Friday. According to this balance sheet, the financial group recorded large losses due to the devaluation of the pesohigh inflation and capital controls that have limited the ability to do business in Argentina.
It is worth remembering that the Minister of Economy, Luis Caputo, carried out a strong devaluation of the official exchange rate on December 13, the most important in almost 35 years, taking it from the $366.45 it was quoted before the change of government to $800 in a single day. That is to say, that an exchange rate jump of 118.3% was applied.
In this way, Citgroup reported a translation loss of approximately US$880 million in revenue in Argentina during the last quarter, as a result of the recent devaluation of the Argentine peso. This decrease in income affected Services, Markets and Banking. The bank also generated net interest income of approximately $250 million on its net investments in Argentina in the fourth quarter of 2023, which is not included in the figures above.
Losses in Argentina: the bank report
Likewise, the banking giant recorded an accumulation of reserves of US$1.3 billion in the quarter, related to the increased risk of transfer associated with exposures outside the United States. This was driven by safety and soundness considerations, under US banking law, specifically in exposures. cross-border and foreign exchange transactions in Argentina (US$720 million).
These were based on prevailing economic trends, currency devaluation and geopolitical risk that could affect Argentina’s ability to maintain external debt service. In addition, there were exposures in Russia ($580 million) due to prolonged political and economic instability.
Citi recorded approximately $780 million in restructuring charges during the quarter, primarily driven by severance, impairment of non-cash assets and other related charges. This was part of the implementation of Citi’s organizational and management simplification initiatives in late 2023.
This data comes from Citi’s fourth quarter and full year 2023 earnings report, which will be released on January 12, 2024.
Source: Ambito
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