Vikram Pandit's Citigroup reports $ 3.8 bn profit
Citigroup announced a better-than-expected third-quarter profit of $ 3.8 billion.
Washington: As Citigroup announced a better-than-expected third-quarter profit of $ 3.8 billion, its Indian-American chief Executive Vikram Pandit emphasised the banking giant's position in emerging markets as a big growth driver.
Though the gains largely came from credit value adjustment (CVA) that allows the bank to book gains from increases in credit spreads, the 74 per cent rise in revenue from a year ago gave it a return of $ 1.23 a share.
Even excluding CVA, Citi's earnings were 84 cents a share beating analyst consensus estimates of 81 cents a share as against 72 cents a share with quarterly profit of $ 2.2 billion for the same period last year.
Revenue rose to $ 20.8 billion in the quarter. Excluding the adjustments, revenue was 8 per cent lower from a year earlier at $18.9 billion. Analysts had expected Citi to report revenue of $ 19.2 billion.
During an investor call, Pandit said growth in the developed world "is likely to be slow for years" and "we remain concerned about the US housing market".
"These are tough times for most economies and for millions of people," he said in a memo to staff. "Macro improvement is not likely to come any time soon."
"We believe mortgages are the biggest risks," he said noting that the financial services firm has seen a surprising uptick in re-defaults on modified home loans.
However, he reiterated his plan to return value to shareholders in 2012, either through a dividend or a stock buybacks.
"Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results," said Pandit who has been engaged on an ambitious plan to streamline the bank three years after being bailed out twice by the US government.