Banking giant Citigroup returns to black
Published 18/01/2011 | 15:09
US banking giant Citigroup returned to the black today after posting net income of $10.6bn (€7.9bn) in 2010.
Citi, which owns credit card brand Egg, posted a net loss of $1.6bn (€1.2bn) in 2009.
The bank added that employee pay and benefit expenses were down 2pc compared to the previous year, to $24.43bn (€18.2bn).
Although the earnings came in under analyst expectations, the figures show Citi has mostly recovered from the losses that drove it to seek a $45bn (€33.4bn) bailout from the US government during the financial crisis.
The results follow better-than-expected figures from rival JP Morgan last week, which reported full-year net income of $17.4bn for 2010.
The figures mark the first profitable year for Citi since chief executive Vikram Pandit took the helm in late 2007. The bank, the third largest in the US, also posted its fourth consecutive profitable quarter - after recording net income of $1.3bn in the final three months.
But earnings of four cents a share in the fourth quarter came below the eight cents a share forecast by economists, as revenues dipped 6pc to $19.5bn. Citi shares slumped 3pc in pre-market trading.
Mr Pandit said: "2010 was a year full of milestones and was critical for the turnaround of this institution.
"Our goal was to achieve consistent profitability and I am very pleased that with our fourth consecutive profitable quarter we earned $10.6bn for the year."
Mr Pandit said its core business Citicorp - which includes retail and investment banking - performed well, while the bank continued to wind down its Citi Holdings arm, which deals with brokerage and asset management.
Mr Pandit continued: "We have the right strategy for our company's present and future and are executing it with discipline.
"Although the economic environment remains uncertain, our future path is clear: as America's global bank, we've built a foundation capable of producing sustained profitability and our next goal is to achieve responsible growth."
Citi is the second of the American players, after JP Morgan, to report in the annual results season. Goldman Sachs reports tomorrow while Morgan Stanley and Bank of America post results later this week.