Bonds bolster Citigroup as writedown hits profits
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 16 October 2012
A mammoth, $4.7bn (£2.9bn) writedown drove Citigroup's third-quarter profits down by nearly 90 per cent – but America's third-largest bank still managed to beat Wall Street expectations yesterday thanks to strength in its bond trading business.
Third-quarter net income fell to $486m, against $3.77bn a year earlier. The drop came after the bank agreed to sell its stake in the Morgan Stanley Smith Barney brokerage business for less than it had hoped, taking a writedown.
But Citi drew strength from its securities and banking arm, whose profits were up nearly 70 per cent as its fixed-income revenues surged. A sizeable tax benefit also boosted the bottom line, helping the bank surpass market hopes.
Citigroup's chief financial officier, John Gerspach, said an uptick in mortgage lending augured well for the US housing market.
Profits in Citigroup's international consumer-banking division were down 3 per cent.
Goldman set for profit but still gloomy
Further signs of the extent of the City slowdown over the summer will emerge today when Goldman Sachs unveils third-quarter results. It is expected to post profits towards $400m (£250m), against a loss a year ago, mainly thanks to America and the Far East – leaving City bankers facing low bonuses and the risk of losing their jobs
Figures just filed at Companies House for the London arm show investment banking revenues down a third in the first half of the year to $421m.
- 1 What happens to your body when you give up sugar?
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
- 4 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 5 Why you're almost certainly more like your father than your mother
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Saudi Arabia executions now at 'unprecedented rate' after kingdom kills four more in two days
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...