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 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Amber Peat: Body found in search for missing 13-year-old who left house after argument with her parents
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Charles Kennedy dead: A guy once asked the Lib Dem leader who his favourite Muppet was and his letter response was wonderful
Gay teenager 'forced to have sex with his own mother' to 'cure' his homosexuality, campaigners in India say
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...