Citigroup has today reported a surprise drop in quarterly revenue due to a steep decline in its fixed income trading business, hurt by volatility in financial markets at the end of the year.
"A volatile fourth quarter impacted some of our market sensitive businesses, particularly fixed income," the bank's chief executive Michael Corbat said in a statement.
The bank's fixed income revenue fell 21% in the quarter due to widening credit spreads.
The squeeze on revenue caused Citi to narrowly miss its efficiency target for the year, despite a 4%decline in expenses.
The bank ended the year with an efficiency ratio of 57.4%, just shy of its 57.3% goal.
A lower efficiency ratio means a bank is better at managing its overhead expenses as a percentage of revenue.
Despite missing its efficiency goals, Citi exceeded its target for returns on tangible common equity (ROTCE), a widely watched measure of how well banks use shareholder money.
Citi reported a 2018 ROTCE of 10.9%, topping its goal of 10.5%.
Citi is the first of the major US banks to report fourth-quarter results.
Wall Street majors JPMorgan Chase & Co, Bank of America and Goldman Sachs will report later this week.
Citi's results, however, may not be a good bellwether for most US banks as it gets roughly half of its revenue from outside the US.
Excluding a one-time tax related gain, the bank's quarterly profit rose to $4.22 billion, or $1.61 a share, in the quarter ended December 31, from $3.70 billion, or $1.28 a share, a year earlier.
Revenue fell 2% to $17.12 billion.
Analysts were expecting a 1.7% rise in revenue to $17.55 billion and a profit of $1.55 per share, according to IBES data from Refinitiv.
