Reporting record net profits for the third quarter of dollars 894m, the US bank said yesterday that its corporate loan book had risen only 2 per cent since December. Tom Jones, executive vice-president for finance, said: 'Our commercial loan growth is quite low, which implies we are being fairly choosy about the activities that we do.'
The market was highly competitive in Europe and the US and that had led to 'pretty thin margins'. He believed Citicorp was to some extent protected from the erosion of margins by its presence in 65 countries, a presence maintained while some US banks were retreating to their home base after their losses in the late 1980s.
Bankers in London and New York have complained of an erosion of the margin on their lending as competition has escalated. This has led to fears of another cycle of poorly judged loans and bad debts.
Citicorp also reported a sharp recovery of dealing profits from depressed levels at the time of the bond market crash in February. The bank made dollars 287m in the third quarter, up from dollars 159m in the second and dollars 71m in the first.Reuse content