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Citigroup posts lowest quarterly loss since '07

makapaaa

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<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published April 18, 2009
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Citigroup posts lowest quarterly loss since '07
But it's still US$966m in the red after loan losses and dividends

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(New York)
CITIGROUP's problems are far from over, but it reported its smallest quarterly loss since 2007.
The bank posted a first- quarter loss to common shareholders of US$966 million after massive loan losses and dividends to preferred stockholders. However, before paying those dividends, which were tied to the government's investment in Citigroup, the bank earned US$1.6 billion.
Citigroup's results were better than expected. The company reported a loss per share of 18 US cents, which was narrower than the 34 US cents analysts predicted. A year ago, Citigroup suffered a loss of more than US$5 billion, or US$1.03 a share.
Citigroup's revenue doubled in the first quarter from a year ago to US$24.8 billion, thanks to strong trading activity in its investment bank. Its credit costs were high, though - at US$10 billion - due to US$7.3 billion in loan losses and a US$2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large US banks, posting quarterly losses since the fourth quarter of 2007.
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</TD></TR></TBODY></TABLE>But in March, CEO Vikram Pandit triggered a stock market rally after he said that January and February had been profitable for Citigroup.
It was one of the first signals that the banking industry might not be as sick as many believed. Earlier that month, fears that banks would need to be nationalised sent stocks plunging to 12-year lows.
Citigroup has been propped up three times by the government since October, taking US$45 billion from the Troubled Asset Relief Program (TARP) and getting a government agreement to share in losses on US$300.8 billion of troubled assets.
'It was slightly better than anticipated, but we probably underestimated how much government support would be a wind at their back,' said Michael Holland, founder of Holland & Co in New York.
'The challenges are still enormous. In the context of what we heard from JPMorgan yesterday with its continuing concerns about the consumer, Citi is going to suffer, too,' he added.
Citigroup's better-than-expected report yesterday come after surprisingly solid earnings from JPMorgan Chase & Co, Goldman Sachs Group Inc, and Wells Fargo & Co over the past several days.
While recent results from these healthier banks have brought some relief to investors, many have been waiting to see how more troubled banks such as Citigroup have fared.
Mr Pandit said in a statement yesterday that he was 'pleased' with Citigroup's performance.
'While we and the industry face challenges in the coming quarters as we work through the weak economy, we will remain focused on strengthening the Citi franchise,' he said.
Separately, Citigroup announced that it was delaying the conversion of as much as US$52.5 billion in preferred shares until after a government evaluation of the bank's financial health, and said that it does not plan to change the number of shares it issues.
Citigroup said in a statement yesterday that it was making progress on meeting regulatory requirements to proceed with the conversion. -- AP, Reuters

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