CITIGROUP POSTED a smaller-than-expected quarterly loss, despite $11.7 billion (€7.38 billion) of writedowns and credit losses tied to deteriorating capital markets and a slumping economy.
Although the second-quarter loss totalled $2.5 billion, Citigroup's results soothed investors, who pushed shares of the largest US bank by assets up $1.56, or 8.7 per cent, to $19.53 in morning trading on the New York Stock Exchange yesterday.
Citigroup shares had bottomed out on Tuesday at $14.01, the lowest since the bank was created in a 1998 merger.
Investors have long sought signs the New York-based bank, one of the hardest hit in the year-long global credit crisis, may finally be ready to turn a corner.
Citigroup's net loss totalled 54 cents per share, and was the bank's third straight quarterly loss. It compared with a year-earlier profit of $6.23 billion, or $1.24 per share.
The operating loss was $2.22 billion, or 49 cents per share, as revenue declined 29 per cent to $18.65 billion.
Citigroup's report followed surprisingly strong profits this week from JPMorgan Chase and Wells Fargo, and a much larger-than-expected $4.89 billion quarterly loss on Thursday at Merrill Lynch.
Other major lenders report quarterly results next week. Citigroup ended the quarter with 363,000 employees after eliminating 6,000 jobs since March.
The bank aims to keep cutting jobs at a similar rate, as chief executive Vikram Pandit tries to shed $400 billion of assets and within three years slash $15 billion of costs. "While there is still much to do, we are encouraged by our progress," Mr Pandit said. - (Reuters)
