Hot Headline: Citigroup can’t maintain its two-quarter gaining streak.
Hotter Headline: Vikram Pandit is immediately restructuring the bank.
Citigroup’s third quarter results are a disappointing report from the bank that still struggles to recover from the crisis and pay off its dues to the federal government. The New York Times writes, “The bank’s headline number — net income of $101 million — came before it accounted for $288 million in preferred dividends and a debt exchange that gives Washington 34 percent of earnings.
After including the items, the loss to stockholders was 27 cents a share, or $3.2 billion, compared with a loss of 61 cents a share, or $2.9 billion, in the third quarter a year ago. Revenue increased to $20.39 billion from $16.25 billion.”
“This was an important quarter for us. The completion of the exchange offers and the significant actions taken during the last few quarters have created a strong foundation. With strong capital, strong liquidity and a strong franchise, we are looking forward,” Mr. Pandit said. “We continue to execute steadily against our plan, and sustainable profitability remains our primary goal in the near term. While consumer credit trends are improving in international markets, the U.S. consumer credit environment remains challenging.”
Citigroup also sold Occidental Petroleum “to avoid a public showdown with the federal compensation specialist over a nine-figure bonus.”
After reading this, we can only say the following things:
Mr. Pandit should be preparing a more sober speech for investors.
The bank should head into a management review and restructuring ASAP.
There would still be issues regarding over compensation in the bank since only its oil arm was dismissed and not the top honchos in the bank itself.
We highly doubt that the last quarter will show signs of recovery.
Andy Denton is the COO of www.Realty.com. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.
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