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Citigroup loses 18 cents a share, beating view
By Greg Morcroft, MarketWatch
Last update: 7:09 a.m. EDT April 17, 2009Comments: 1
NEW YORK (MarketWatch) - Citigroup, once the largest U.S. bank, reported better-than-expected first-quarter results -- a loss available to common-share holders of 18 cents a share -- on strength in the institutional-clients group plus tight expense controls, though the group continues to take charges to reserve for consumer defaults.
Citi (C:4.01, +0.04, +1.0%) posted net income of $1.59 billion compared with a loss of $5.11 billion in the year-earlier period.
For common-share holders, the loss was $966 million, or 18 cents a share, compared with a loss of $5.19 billion, or $1.03, in the year-earlier period.
For common-share holders, the loss was $966 million, or 18 cents a share, compared with a loss of $5.19 billion, or $1.03, in the year-earlier period.
The loss for common-share holders reflects $1.22 billion of preferred-stock dividends; $1.29 billion tied to the reset of the conversion price on $12.5 billion of convertible-preferred stock issued in a January private offering; and $53 million to amortize the TARP warrant discount.
Analysts polled by Thomson Reuters had expected the bank to post a loss of 32 cents a share for the first quarter.
Investors lauded the results, boosting the shares 16% in premarket trading.
Revenue nearly doubled to $24.79 billion from $12.44 billion
Citi, which has received direct investments of about $45 billion and loan guarantees backing more than $250 billion of assets from the government, has seen its stock leap over the past month as investors hoped that the deterioration in its businesses is slowing.
In March the firm's shares fell below $1 for the first time amid concern that government nationalization might wipe out the shareholders. But subsequent comments from Citi and other major banks that January and March results were profitable sparked a sectorwide rally that continued this week.
Chief Executive Vikram Pandit said Citi was "pleased with our performance." Citi's clients "remain closely engaged with us," he said.
He said in a statement that the results overall were the company's best since second-quarter 2007, reflecting lower risk, fewer problem assets, tighter cost controls and more efficient operations.
Citi said that its credit costs of $10.3 billion were up 76%. They consisted of $7.3 billion in net credit losses, a $2.7 billion net loan-loss-reserve increase, and $332 million of policyholder benefits and claims.
The net interest margin - the difference between what a bank takes in on loans and pays out on deposits - widened half a percentage point from a year earlier, to 3.30%.
Revenue fell 10%, to $5.77 billion, in the Global Cards division; fell 18%, to $6.4 billion, in Consumer Banking; and fell 20%, to $2.62 billion, in Global Wealth Management.
The key revenue improvement: the Institutional Clients Group swung to positive revenue of $9.51 billion from a negative $4.96 billion a year earlier.
Citi said it has pared 13,000 jobs since the fourth quarter, leaving it with 309,000 workers. It's in the midst of a program to trim 50,000 jobs and sell hundreds of billions of dollars of noncore assets.
Citi was the third big bank this week to post better-than-expected earnings, following Goldman Sachs (GS: |
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