NEW YORK — Citigroup Inc., the nation's largest financial institution, reported record profits for the fourth quarter but said that 2005 earnings could be at the low end of Wall Street expectations.
Also Thursday, Atlanta-based SunTrust Banks Inc., the seventh-largest banking company, posted a 33 percent increase in fourth-quarter profits. Chairman and chief executive L. Phillip Humann told analysts that "we know of no reason to back away" from the company's earlier guidance of 2005 earnings of $5.48 a share.
The latest reports came at the end of a mixed earnings season for banks.
On Wednesday, JPMorgan Chase & Co., the No. 2 bank behind Citigroup, missed its earnings target amid charges for the integration of Bank One operations. A day earlier, Bank of America Corp., the nation's third-biggest bank, reported sharply higher fourth-quarter earnings that matched Wall Street expectations.
Shares in Citigroup dropped 27 cents to close at $47.77 in Thursday trading on the New York Stock Exchange. SunTrust shares rose $1.22 to close at $71.59.
Citigroup, which is headquartered in New York, said profits for the fourth quarter totaled $5.32 billion, or $1.02 a share, up 12 percent from $4.76 billion, or 91 cents a share, a year earlier. That was in line with the expectations of analysts surveyed by Thomson First Call.
Citigroup said its fourth-quarter results included a $244 million after-tax charge related to closing its Japan Private Bank amid allegations of improper activities and a $131 million after-tax reserve related to resolution of a Securities and Exchange Commission investigation dealing with transfer agents.
Chief financial officer Sallie Krawcheck told a conference call with financial analysts that she was "more comfortable" with 2005 earnings projections at the lower end of analyst expectations. Analysts surveyed by Thomson First Call project the bank's earnings for this year in a range of $4.20 to $4.57.
Krawcheck and the bank's chief executive officer, Charles Prince, said higher interest rates and lower credit quality would require Citigroup to increase reserves. This year, the bank's bottom line has benefited from the release of reserves.
In a statement accompanying the earnings report, Prince said that "although the legal and regulatory charges we recorded in 2004 were significant disappointments, resolving open legal and regulatory issues is a key management priority."
Revenue for the fourth quarter was $21.88 billion, up 8 percent from $20.2 billion a year earlier. For the year, revenue was $86.2 billion, up 11 percent from $77.4 billion in 2003.
For the year, Citigroup earnings were $17.05 billion, or $3.26 per share, down from $17.85 billion, or $3.42 a share, in 2003. Excluding one-time charges, earnings would have been $21.2 billion, or $4.07 per share, Citigroup said.
Citigroup also announced Thursday that its board approved a 10 percent increase in the company's quarterly dividend to 44 cents from 40 cents.
SunTrust Banks Inc., a bank-holding company in the Southeast and mid-Atlantic regions, said its fourth-quarter earnings totaled $455.7 million, or $1.26 a share, up from $342.5 million, or $1.21 a share, a year earlier.