Citigroup Continues to Recover with Better-than-Expected Third Quarter Profits
Oct 18th, 2010 @ 4:52 AM by Debbie Dragon
While financial analysts continue to debate whether or not the economy is starting to recover, Citigroup, one the largest global banks, is showing profits for a third straight quarter. This is leaving many experts to believe that the bank just might be standing on solid ground. Citigroup was one of the hardest-hit financial companies of the recession and received government funding in the amount of $45 billion to stay afloat. The $45 billion has dwindled and predictions are that Citigroup will be running totally on its own by year’s end.
“Achieving our third straight quarter of positive operating earnings is continued evidence that we are successfully executing our strategy and we believe we have put in place all the elements for continued profitability,” Citi chief executive Vikram Pandit said in a statement.
In the third quarter of this year, the bank earned a total of $12.15 billion and showed a profit of $2.2 billion. The company’s stock was up 4% or 7 cents per share. Last year during the same quarter the company lost 3.4 billion and went down 27 cents per share.
The majority of the third quarter profit, 1.9 billion, was from money previously set aside by Citigroup to cover the loss of funds for loans that might go bad. Removing the money from these funds shows that the company is letting down their guard and feeling confident in their continued success. During the third quarter their loan losses dropped 30% and it was their 5th consecutive quarter of declining losses. Both credit card and mortgage losses for the company seem to be on a steady decline.
Other positive statistics for the company showed that 19% fewer Citgroup credit card holders were 90 days late on their credit card payments and 24% fewer card holders were 30 days late on their payments.
Another positive it seems for Citigroup is that they are known globally and only about one half of their banks are actually located in the United States. While the rest are distributed across the globe, those banks in the Latin and Asian markets are definitely growing, helping to add to the company’s bottom line.
Debbie Dragon is a full time freelance writer and the co-owner of ReliableWriters.com.