Citigroup's shares drop after a 26% decline in fourth-quarter profits.

• The sharp decline in Citigroup's net income, which dropped 26% to $3.2 billion, was attributed to an increase in expenses by the company.
• The operating expenses of Citigroup increased by 18% year-over-year to $13.5 billion in the quarter.

On Friday, the banking giant reported a steep profit drop for the fourth quarter, causing shares to fall more than 1%.

In contrast to analysts' predictions, the bank's performance in the quarter was not as expected.

• Earnings per share: $1.46 vs. $1.38 estimated by Refinitiv
• Revenue: $17 billion vs. $16.75 billion expected

The sharp decline in Citigroup's net income, which dropped 26% to $3.2 billion, was attributed to an increase in expenses. The results also included a "pre-tax impact" of about $1.2 billion related to the sale of its consumer banking businesses in Asia.

The operating expenses of Citigroup increased by 18% year-over-year to $13.5 billion in the quarter.

The global consumer banking business of the company experienced a 6% decline in revenue year over year, amounting to $6.94 billion. In the North America region, Citigroup's revenue decreased by 6% to $4.4 billion, mainly due to a decline in sales from Citi-branded cards and retail services. In Asia, revenue dropped by 9%, while Latin America sales declined by 4%. Additionally, expenses within the bank's global banking division increased by 33% from the previous year.

Citigroup's institutional clients group experienced a 4% increase in revenue to $9.9 billion, primarily due to an 18% increase in investment banking. However, the fixed income markets revenue decreased by 20% year over year to $2.5 billion.

In 2021, Citigroup reported a net income of $21.95 billion, which was nearly double the previous year's net income of $11.03 billion. However, the full-year revenue decreased by 5% to $71.88 billion from $75.54 billion in 2020.

Our steady progress in executing our strategy is evident through the recent signing of an agreement to sell four consumer businesses in Asia, as CEO Jane Fraser stated in a release," the bank announced. "We are transforming our bank by emphasizing simplification and cultivating a culture of excellence.

Jane Fraser was tasked with enhancing the returns of the third-largest U.S. bank by assets when she assumed leadership from Michael Corbat a year ago.

She has decided to exit less profitable parts of the firm's global empire. Her first major strategic move was to leave 13 retail markets across Asia and Europe; since that April announcement she has disclosed plans to depart South Korea and Mexico.

JPMorgan Chase posted stronger-than-expected numbers, but the stock still dipped 6.2%. Wells Fargo shares gained 3.7% on the back of a better-than-forecast revenue figure. The bank’s results followed and released their latest quarterly numbers.

— CNBC’s Hugh Son contributed to this report.