Citigroup's fourth quarter earnings fell short of Wall Street's expectations as the bank's legal expenses rose and it released less money from its loan-loss reserves.
The bank, based in New York, said a big chunk of the legal expenses came from a settlement reached last week over illegal foreclosure practices in the aftermath of the housing bust.
It was Citigroup's first quarter under the leadership of CEO Michael Corbat, who took the helm after former CEO Vikram Pandit resigned abruptly in October.
"We recognize that our net income today doesn't yet reflect the amount or caliber of earnings that our shareholders expect and our franchise is capable of," Corbat said on a conference call with analysts to discuss the results.
Corbat's first bold move was a decision, announced in December, to cut 11,000 jobs, close dozens of branches and trim its consumer banking business in some countries. More than half of the job cuts were to come from the company's consumer banking unit. Citigroup took a previously announced charge of $1 billion in the quarter related to that "repositioning" process.
The bank has cut 7,000 jobs since the year-ago quarter, about 3 percent in its overall work force. Since the previous quarter, 3,000 jobs were eliminated. Citigroup now employs 259,000 people.
Citi earned $1.16 billion after paying preferred dividends, or 38 cents per share, in the three months ended Dec. 31. That compares with $933 million, or 31 cents per share, in the same period a year earlier.
Excluding one-time costs related to restructuring and accounting for outstanding debt, the bank earned 69 cents per share. That's well below the 97 cents per share analysts polled by FactSet were expecting.
Citigroup's Latin American and Asian operations, a traditional source of strength for the bank, helped drive the earnings growth. Net income from both regions rose 16 percent over fourth quarter of 2011.
In Europe, the Middle East and Africa, net income fell 6 percent from the previous year.