Business NEWS
Vikram Pandit beat expectations, Citigroup Posts $1.6 Billion Profit
By Amarendra Bhushan for CEOWORLD Magazine Updated:April 17, 2009
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Citigroup posted a smaller-than-expected loss since 2007 thanks to cost-cutting and improved investment banking.
Citi’s the third large institution this week, after Goldman Sachs Group and J.P. Morgan Chase & Co., to report stronger-than-projeccted results.
Citi posted net income of $1.59 billion compared with a loss of $5.11 billion in the year-earlier first quarter.
The company reported a loss per share of 18 cents, which was narrower than the 34 cents analysts predicted.
Citigroup’s revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong fixed-income and other trading in its investment bank.
Revenue doubled to $24.8 billion in the latest quarter. Citigroup cites strong trading results and lower writedowns in securities and banking.
“Our results this quarter reflect the strength of Citi’s franchise and we are pleased with our performance,” said CEO Vikram Pandit. “With revenues of nearly $25 billion and net income of $1.6 billion, we had our best overall quarter since the second quarter of 2007.”
Citigroup is back in black in 2009, closing Q1 with a 1.6 billion dollar profit. In 2008 losses amounted to 18.2 billion dollars, with a 5.1 billion loss in Q1. Q1 turnover amounted to 24.8 billion dollars, representing an 18 cent loss on each share.
This 18 cent share loss was given by dividends paid out to privileged shareholders, otherwise there would have been no loss in share value.
Citigroup, after posting a string of losses for the previous five consecutive quarters, follows conglomerates Goldman Sachs, JP Morgan, which have surprised the street with better earnings than, estimated in the first quarter of this year.
Some other banks that have announced first-quarter profits said that they would soon repay government aid, but Citigroup did not go that far.
Citigroup also said it will delay a planned exchange of $52.5 billion of preferred shares into common stock, but will not change the terms.
Chief Financial Officer Ned Kelly said in a conference call with investors that certain consumer delinquency rates have been moderating, but he still expects loan losses to worsen before they improve.
MARCY GORDON and DANIEL WAGNER writes, A flurry of better-than-expected bank earnings reports this week, coupled with some tentatively encouraging economic data, suggest the economy and the financial system might not be quite as sick as many had believed.
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