Citigroup income hits $1.2bn
New York, January 18, 2013
Citigroup posted $2.32 billion of charges for layoffs and lawsuits in the first financial report under its new chief executive, Michael Corbat, who cautioned that the bank needs more time to deal with the problems it faces.
Even with the charges, Citi yesterday reported a higher fourth-quarter profit as trading revenue rebounded. Fourth-quarter net income was $1.2 billion, or 38 cents a share, compared with $956 million, or 31 cents a share, in same quarter of 2011.
But the result was well below Wall Street expectations, and the company's shares fell 3.4 per cent in early trading.
Corbat said Citi's various businesses were combating competitive and regulatory problems, as well as issues dating to the financial crisis. "It will take some time to work through the challenges of the current environment," he said, adding that the bank's "critical goals" include improving its return on assets.
Revenue from fixed income markets increased 58 per cent, driving Citi's Securities and Banking segment back to profitability.
Companywide revenue, adjusted for certain items, increased 8 per cent, while operating expenses were unchanged.
Results were reduced by new legal costs of $1.29 billion, or 27 cents a share, and a previously announced corporate restructuring charge of $1.03 billion, or 21 cents a share.
Citigroup chief financial officer John Gerspach said $500 million of the new legal costs came from what he called a variety of issues in the ongoing US consumer banking business.
Expenses recorded for changes in the value of some of the bank's debt and obligations of derivatives counterparties were 10 cents a share, compared with one cent a year earlier.-Reuters