NEW YORK — Citigroup Inc.'s fourth-quarter profit fell 11% from a year earlier as choppy capital markets overshadowed the bank's continued recovery from the financial crisis.

The global bank made more loans around the world — even in the United States — and it's capital continue to improve, but a particularly weak fourth-quarter bond market turned dismal in December, hitting Citi at a sensitive spot.

Citi reported fourth-quarter earnings of $1.17 billion as revenue fell 7% to $17.17 billion. Citi shares, down 40% over the past 12 months, fell 2.7% premarket to $29.90 as results fell well short of analyst expectations.

"Overall, we made solid progress in 2011," Chief Executive Vikram Pandit said in a press release. But "clearly, the macro environment has impacted the capital markets, and we will continue to right-size our businesses to match the environment."

The bank blamed a continued weak economic recovery in developed countries, and skittish investors scared by the European debt crisis, but a slew of one-time charges also hurt results.

Citi took a $40 million charge tied to the valuation of its own debt and added $557 million to its reserve for litigation. As previously announced, the bank took a $300 million charge because of its Japan operations and a $400 million hit from 4,500 job cuts.

An aggressive push abroad has been a boon for Citi, and its strong consumer operation overseas continued to help; however, rocky capital markets left most of Wall Street struggling to improve.

Citi's fourth-quarter results underline Citi's struggle to offset trading, underwriting, and advisory results with an upswing in lending. Overall loans rose 14%; international consumer loans rose 6%, excluding the impact of the weak dollar.

Citi reported earnings of 38 cents a share, down from 43 cents a share a year earlier. Analysts polled by Thomson Reuters expected a per-share profit of 48 cents on $18.57 billion in revenue.

Similar to its fellow banks, Citi has benefited lately from reducing funds set aside to cover bad loans. Total credit costs in the fourth quarter came in at $4.1 billion, down from $4.84 billion a year earlier and $3.35 billion in the third quarter. Citi reduced it's reserve for bad loans by 1.5 billion.

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