2018.01.1620:06:00UTC+00Citigroup Posts $18 Billion Quarterly Loss

Citigroup Inc. reported an $18 billion quarterly loss due to one-time item tax charges, but its revised earnings surpassed Wall Street expectations and management indicated that the lender may soon raise financial performance targets.

President Donald Trump signed the law last month that posed problems for big banks' fourth-quarter earnings. The law forces lenders to receive one-time hits on earnings held overseas and changes the processing of deferred tax assets, both of which impact Citigroup particularly.

The fourth biggest U.S. lender expects its tax rate to decline to around 25 percent this year from 30 percent in 2017. CEO Michael Corbat said that the changes will not only bolster the bank's profits, but enable it to generate higher returns and more capital.

Based on the tax savings, Citigroup expects to see a return on tangible common equity of 10.5 percent this year, 12 percent in 2019 and 13 percent in 2020, higher than the prior estimates.

Citigroup executives also anticipate inflation to increase the bank's net interest income as the Federal Reserve continues to raise rates this year.

Citigroup shares advanced 0.4 percent to $77.12 in morning trading.