Citi's profits dived 86 per cent in the final quarter of the year as the giant US lender set aside $3.5bn (£2.3bn) to cover legal settlements and the cost of its restructuring.
Profits for the final three months of 2014 came in at $350m, compared with $2.5bn in the same period of 2013.
Revenues held steady on the year at $17.8bn, but the overall results were dragged down by legal bills.
Litigation costs rocketed to $2.9bn, from $809m in the same quarter of 2013, while repositioning costs jumped from $234m to $655m. Citi is also in the process of closing its consumer banking arm in a series of countries in a bid to focus its resources in areas where returns are higher.
For the year as a whole those costs totalled $7.4bn.
Chief executive Michael Corbat argued the major provisions for litigation have put the bank on a better footing for next year.
“Although we made some difficult decisions over the course of the year, I believe they allowed us to put our franchise in a position to have a successful 2015,” he said.
“While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased our market share among our target institutional clients, grew our core loan book, and improved both our net interest revenue and margin from 2013 levels.”
But markets were less optimistic – the bank’s shares fell 3.71 per cent on the day.
The reason was poor performance in other areas, on top of the extra costs.
Fixed income, currencies and commodities (FICC) trading revenues fell 16 per cent on the year to $2bn, while equities revenues fell three per cent on the year to $471m, and defied hopes that the incomes would increase.
However, the bank is hoping that a sustained burst of economic growth and consumer incomes will improve its prospects.