Citigroup set to post fourth quarterly profit
Citigroup Inc, the bank that took USD 45 billion in US bailout funds during the financial crisis, is widely expected to report its fourth consecutive quarterly profit on Tuesday, signaling to investors that it has largely completed its recovery.
January 18, 2011 / 12:50 IST
Citigroup Inc, the bank that took USD 45 billion in US bailout funds during the financial crisis, is widely expected to report its fourth consecutive quarterly profit on Tuesday, signaling to investors that it has largely completed its recovery.
Analysts on average expect the third-largest US bank by assets to post a profit of 8 cents per share for the fourth quarter of 2010, according to Thomson Reuters I/B/E/S.That would compare with a year-ago loss of 33 cents per share.Citigroup has largely recovered from the losses that drove it into the government's arms during the financial crisis and has shed most of the resulting government ownership.The US Treasury finished selling off its common share stake in Citigroup in December. The Treasury said on Friday it would unwind its final investment in the bank by auctioning off remaining warrants.Shares of Citigroup closed at USD 5.13 on Friday -- their highest point since August 2009. The bank's shares have surged 55% since the beginning of 2010, and gained additional momentum last month after the US government sold the last of its stake.The bank's fourth-quarter profit is expected to lag that of larger rival JPMorgan Chase & Co, which beat analyst expectations on Friday and boosted investor sentiment about the outlook for the banking industry.JPMorgan "set the bar very high," said Michael Holland, who oversees USD 4 billion of assets as chairman of Holland & Co. "I think Citi is probably going to do very well but ... (Chief Executive) Vikram Pandit has a tall order to fill here when it comes to doing the same thing," he added.Citigroup, like other banks, has seen its losses from bad loans shrink over 2010. But its revenues faltered in the face of weak loan demand and a slump in trading volumes over the second half of the year.JPMorgan Chase said on Friday that it was starting to overcome both conditions, giving bank investors hope that other banks could start to see an increase in loan demand and trading profit this year. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
