One of the largest banks in the United States announced significant losses due to the strong impact of the Argentine currency crisis

In line with what was published by major banks in the United States, although to a greater extent, Citigroup announced to its investors that in the fourth quarter of last year it recorded losses amounting to $1.8 billion, largely due to its accumulation. Cash to cover exchange rate risks in Argentina and also in Russia.

At the same time, the authority confirmed that it will eliminate 20,000 jobs over the next two years, as its financial director expected, Mark Mason.

The executive explained that the charges related to the fall of the Argentine peso and the reorganization of the bank, which is the process that the entity is conducting globally to increase its level of profitability, were much higher than what was revealed by the company’s financial management. The company just a few weeks ago. Q4 2023 results, released this morning, were impacted by losses of $880 million in peso currency conversion and another $780 million in restructuring expenses related to the company's simplification project. This means that losses from Argentina's exchange crisis represent 45% of the total, roughly half of the dismal result.

In this context, the decision to dismiss 10% of its employees was approved. The cuts will affect about 20,000 employees in the medium term, according to a panel published by the entity on Friday as part of its business results for the fourth quarter and 2023. Although the timeline for the layoffs is not yet clear, Citigroup has used the phrase “medium term “to refer to periods between three and five years in the past,” CNBC reported.

Citi's case was framed as a presentation of results by North American banks, whose profits fell in the last four months across the board, as they all held on to cash to replenish a government insurance fund that had been depleted by last year's bank failures. And also because they had to reduce their profit margins in the competition to attract deposits. But in City's case, the Argentine element played a dominant role.

JPMorgan, Wells Fargo and Bank of America, the nation's largest lenders, also showed signs that the Fed's high interest rate hikes, which allowed them to make more loans, may be ending. The Federal Reserve has raised interest rates in an attempt to curb runaway inflation, but with price rises slowing, the main question facing markets is the likely pace of interest rate cuts this year and whether the economy will avoid a recession.

Collectively, the banks provided more than $8 billion to replenish the Federal Deposit Insurance Corp.'s deposit insurance fund, which took a $16 billion loss after Silicon Valley Bank and two other entities went bankrupt last year.

Beyond this specific hit, the panorama was diverse. JPMorgan Chase's profits fell in the fourth quarter, but it posted record annual profits of $49.6 billion and net interest income — the difference between what banks earn on loans and what they pay to depositors — rose 19 percent.

Meanwhile, Bank of America's profits fell due to Federal Deposit Insurance Corporation (FDIC) charges, a one-time impact on the way some operations are indexed, and a 5% decline in net interest income, as the bank spent more to maintain customer deposits and continued demand for loans. . Defeated amid high rates. Of the four companies, Wells Fargo was the only one to report an increase in profits thanks to cost cuts, beating analysts' expectations.