Citigroup third-quarter earnings grow as bad loan provision eases

the third-largest UK bank reported higher third-quarter earnings as it set aside less money to cover bad loans and recorded an accounting gain banks can take in turbulent markets.
By The Newsroom
Published 18th Oct 2011, 10:37 BST

Citigroup said investment banking fees dropped as the European debt crisis cut into stock and bond issuance and merger activity.

Operating expenses rose, in part because of investments the bank is making to boost its business.

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It reported net income of $3.77bn, or $1.23 per share, up from $2.1bn, or 72 cents per share, in the same quarter last year.

The third-quarter results included a pre-tax gain of $1.9bn, or 39 cents per share after taxes, due to the bank’s widening credit spreads during the quarter.

Revenue at the bank’s continuing securities and banking business fell 12 per cent excluding the debt value adjustment, to $4.84bn, hurt by declining underwriting and merger advisory fees.

JPMorgan Chase & Co also reported declines in investment banking fees when it reported third-quarter results last week.

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Overall operating expenses for Citigroup rose eight per cent from a year earlier.

Operating expenses were $12.46bn and have been hovering around that level since the fourth quarter of 2010. From the beginning of 2009 through the third quarter of 2010, quarterly operating expenses were typically closer to $11.9bn