Citigroup Q3 Profit Rises on Accounting Adjustment (C)
Citigroup Inc. (NYSE: C) today released its third-quarter financial results, posting a 68% increase in earnings due to an accounting adjustment and strength in its international operations.
The New York City-based bank reported a gain of $1.9 billion related to the valuation of its own debt. The bank also continued to see improvement in losses from soured losses, enabling it to lower its loan loss reserve by $1.4 billion.
Citigroup posted a profit of $3.74 billion or $1.23 per share for the third quarter. Excluding the accounting gain, the company’s profit for the quarter was $0.84 per share compared with analysts’ estimate of $0.81 per share.
Citigroup’s third-quarter revenue, however, dropped 8% on a year-over-year basis to $18.9 billion, reflecting what has been a tough quarter for global banks due to the volatility in the financial markets. Third-quarter revenue also fell short of analysts’ expectations of $19.25 billion. Strong performance in Asia could not offset the weak results from the bank’s investment banking and trading business in the third quarter. Citigroup’s capital markets division reported a 12% decline in revenue to $4.8 billion.
Citigroup’s Citicorp division, which includes the retail banking and commercial and investment banking business, reported a 32% increase in third-quarter profit on a 8.70% increase in revenue. Citi Holdings, meanwhile, reported a loss for the quarter.
Citigroup also said that it has decided to not sell its partner credit card business. The business was previously marked for divesture; however, Citi CEO Vikram Pandit said in a memo to the staff that bank has decided to continue with the business. Pandit said that the portfolio not only fits the current credit environment but also the bank’s strategy of building and strengthening relationships with its corporate clients. Commenting on the bank’s performance in the third quarter, Pandit said that the market turmoil of recent months, driven by external factors from global growth to sovereign debt issues in Europe has affected the entire economy. Despite these issues the company performed well, Pandit noted.
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht. |