NEW YORK - Citigroup the third largest bank in the United States posted a small gain today, when it reported its fourth quarter results. The company said it earned 4 cents a share or $1.3 billion. The profit is in line with banks which are much smaller including PNC Financial which is expected to report $1.1 billion of profit on Monday. The difference is Citigroup is valued at over 5 times the market capitalization.
Citigroup continues to see provisions for credit losses decline to essentially $2.4 billion. The actual provision number was $4.6 billion but the first number is more correct due to credit releases which cancel out provisions. This is down from $8 billion of provisions in Q1, 2010. Citigroup's profit was dragged down by lower revenue of $18.3 billion down from $20.7 billion in Q3.
The company improved its capital ratios in the quarter, as its tier 1 common ratio one of the best indicators of a banks safety rose to 10.7% from 10.3% from the previous quarter. This gives Citigroup one of the strongest ratios among banks. Citigroup which has over 29 billion shares outstanding has issued shares over the last year which has boosted its capital to this extremely high level. The company saw nonperforming loans drop to $42 billion from $48 billion in Q3.
Shares have moved lower on the disappointing results. Shares have dropped nearly 7% as we approach midday.
No comments:
Post a Comment