Reuters: Global Markets: Citigroup second-quarter profit falls on losses from older assets

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Citigroup second-quarter profit falls on losses from older assets Jul 16th 2012, 13:03 Tweet Share this Email Print Related News Analyst View: Citigroup earnings fall as legacy assets weaken 9:03am EDT Analysis & Opinion More to the financial crisis than just subprime Should Goldman Sachs go out of business? Related Topics Hot Stocks » Asian Markets » A Citibank sign on a bank branch in midtown Manhattan, New York, November 17, 2010. Credit: Reuters/Mike Segar NEW YORK | Mon Jul 16, 2012 9:03am EDT NEW YORK (Reuters) - Citigroup Inc said second quarter profits dropped as it lost money on the sale of a stake in a Turkish bank and suffered from the drag of its troubled assets left over from the 2007-2008 credit crisis. Net income fell to $2.9 billion, or 95 cents per share, from $3.34 billion, or $1.09 a share, in the same quarter a year earlier, the company said. The results included a $424 million loss from the sale of a 10.1 percent stake in Akbank TAS of Turkey and a $219 million gain from changes in the market value of its own debt and that of certain trading partners. The company lost $920 million in Citi Holdings, where it houses bad assets from the credit crisis, compared with a $661 million loss in the same quarter last year. The company said Citi Holdings now contains 10 percent of total assets, down from 11 percent three months ago. Excluding the debt accounting adjustments and the Turkish bank sale, earnings per share were $1.00 while net income was 1 percent lower than a year earlier, the company said. Operating expenses declined 6 percent. Citigroup shares rose 3.4 percent to $27.55 in premarket trading. "We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services," Citigroup Chief Executive Vikram Pandit said in a statement. Citigroup is the third largest U.S.-based bank by assets. (Reporting by David Henry in New York and Rick Rothacker in Charlotte, North Carolina; editing by Jeffrey Benkoe) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) Citibank is doing the right thing in better focusing on what it is good at and recognizing losses before they become total losses. In the case of all Turkish banks, they may face considerable short term pressure if Turkey and Syria go to war. Turkey has the 2nd largest Army in NATO and it should be able to defeat Syria promptly in a war, but mortgages of property destroyed in war are nearly worthless, and Syria might still have the capability to do some real damage before its air force is out of planes and pilots. War is never totally predictable. As a minor shareholder I bought Citibank shares originally because of its decision to consolidate its U. S. operations in retail banking to focus on its New York business and global banking. I am still looking for its to be a worthwhile investment when the U. S. economy recovers and helps the rest of the world outside of China to grow economically. Jul 16, 2012 8:46am EDT  --  Report as abuse See All Comments » Add Your Comment

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