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 Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 The enemy within: People who hear voices in their heads are being encouraged to talk back
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Howard 'Mr Nice' Marks reveals he has inoperable cancer: 'I've had an incredible life'
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...