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Updated from 8:46 a.m. EST

A loud week for bank earnings ended on a fuzzy note with



posting a 12% jump in fourth-quarter earnings but seeming to temper expectations for the coming year.

Citigroup earned $5.32 billion, or $1.02 a share, in the final quarter of 2004, compared with $4.76 billion, or 91 cents a share, a year ago. Net revenue at the bank was $21.87 billion, up 9% from a year ago.

The nation's biggest bank beat by a penny the Thomson Financial consensus earnings estimate of $1.01 a share. Revenue came in slightly ahead of the consensus estimate of $21.6 billion. Up until a few weeks ago, analysts had been expecting Citi to earn $1.02 a share.

Citi took a $244 million after-tax charge in the quarter stemming from the closing of its scandal-tarred Japan Private Banking unit. It also set up a $131 million reserve to pay for an expected settlement with regulators over an investigation into the bank's stock transfer agent activities.

In early trading, the bank's shares were down 25 cents to $47.79.

The earnings come in a mixed week for bank investors. On Wednesday, No. 2 bank

J.P. Morgan Chase


said quarterly earnings fell 11% from a year ago and missed Wall Street estimates, while on Tuesday, No. 3 bank

Bank of America


reported a 41% increase in profits. Wednesday night, mortgage giant

Washington Mutual


said profit fell to $668 million from $842 million, but still beat estimates.

On Thursday,



reported a 33% rise in profits to $456 million, or $1.26 cents a share. Excluding charges, the bank earned $1.31 a share, which bested the consensus estimate by 4 cents.

But SunTrust, the nation's 10th-largest bank, said it remains hobbled by an overstatement of its loan reserves early last year. The

Securities and Exchange Commission

has opened a formal inquiry into the $25 million accounting error and the bank fired a number of employees. SunTrust said Thursday it expects the bank's auditors to issue an "adverse opinion" on the effectiveness of its internal controls and will disclose more information about the "material weakness" in this area in its forthcoming annual report.

Regulatory issues also were a big headache for Citi in the fourth quarter.

Last year will be remembered as another one in which the enormously profitable Citi found its reputation tarnished by scandals. Besides being forced to apologize to the Japanese government for the activities of its private banking group, Citi also took a hefty $4.95 billion charge against earnings during the year to pay a settlement of a lawsuit arising out of its dealings with



"Although the legal and regulatory charges we recorded in 2004 were significant disappointments, resolving open legal and regulatory issues is a key management priority," said CEO Charles Prince, in a prepared statement.

One of the remaining legal issues for Citi is a looming settlement to shareholders of


, a major investment banking client of Citi.

The fourth-quarter earnings, meanwhile, got some help from continued improvement on the credit front. The bank said declines in consumer and corporate defaults enabled it to release $605 million from its loan loss reserve, a move that bolstered earnings.

"The credit environment is the best in more than a decade," Citi CFO Sallie Krawcheck said in a Thursday morning conference call.

Krawcheck offered a somewhat sober outlook for earnings in 2005. She says, "I'm more comfortable with the bottom end of analyst estimates than the top end."

Right now, analysts' full-year estimates range between $4.20 and $4.57 a share.

Krawcheck described the economy as being "good but not great."

Fourth-quarter earnings at Citi were fueled mainly by the continuing strong performance of its consumer banking group and a rebound in investment banking work. Earnings at the global consumer group rose 17% to $3 billion, while Citi's corporate and investment banking division generated $1.69 billion in earnings, a 32% jump over a year ago.

Citi hiked its quarterly dividend by 4 cents to 44 cents, next payable Feb. 25.