Citigroup’s problems are far from over, but today the New York bank with branches in Connecticut reported its smallest quarterly loss since 2007.
The bank posted a first-quarter loss to common shareholders of $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 $1.6 billion.
Citigroup’s results topped analyst forecasts. The company reported a loss per share of 18 cents, which was narrower than the 34 cents analysts predicted, according to Thomson Reuters. A year ago, Citigroup suffered a loss of more than $5 billion, or $1.03 a share.
At 11 a.m., Citigroup traded at $3.71, down 30 cents, or 7.5 percent.
Separately, Citigroup said today it is delaying the government’s exchange of billions of dollars worth of preferred shares into common shares until the government completes its “stress test.” The government has been gauging the health of U.S. banks, and the results are expected in early May.
Citigroup’s revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though — at $10 billion — due to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. 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 nationalized sent stocks plunging to 12-year lows.
Pandit said in a statement Friday 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. (AP)
