Citi records $101 million profit on recovery road
The Citigroup led by its Indian American chief executive Vikram Pandit has reported a slim profit of just $101 million in the third quarter, indicating its road to recovery may be a little longer.business Updated: Oct 16, 2009 13:10 IST
The Citigroup led by its Indian American chief executive Vikram Pandit has reported a slim profit of just $101 million in the third quarter, indicating its road to recovery may be a little longer.
With credit problems, particularly within its consumer-related businesses, weighing down its third-quarter results and after taking into account the recent conversion of part of the government's preferred stake in the company into common stock, the New York-based bank Thursday reported a loss of 27 cents a share.
As one of the harder hit banks in the crisis, Citigroup has been on a campaign to get back to sustained profitability, going so far as to split the company into two divisions and selling off several of its many diverse businesses in recent months.
Earlier this year, there were signs it was making progress. In both April and July, the company stunned Wall Street by reporting surprise profits.
And while Thursday's results were much better than analysts anticipated, it also left many wondering whether the embattled bank has finally turned a corner, CNNMoney.com said. They would also likely do little to alleviate some of the pressure currently facing Pandit.
Since being installed at the helm of the company in December 2007, he has faced scepticism about his ability to lead the troubled lender and was criticised for moving too slowly to implement a restructuring plan.
A recent favourable review of Citigroup management, including Pandit, reportedly raised eyebrows among officials at the Federal Deposit Insurance Corp., according to the Wall Street Journal.
Speaking with analysts Thursday, Pandit sounded confident about the company's restructuring efforts, noting that the company's capital levels, a key measure of the bank's ability to absorb losses, was among the strongest in the industry.
He even broached the sensitive issue of TARP, the Treasury's Troubled Asset Relief Programme, noting that the company was looking to pay it back "as soon as possible."
"We have been steadily executing our plan to build financial strength," he said. "I feel really good about the progress we have made."
Citigroup shares, which have lost a quarter of their value since the start of the year, declined more than 5 percent in late Thursday trading.