Citigroup posts 3.8 billion Q3 gain

Oct 17, 2011, 13:49 GMT

Washington - Citigroup, the third-largest bank in the United States, reported net third quarter income of 3.8 billion dollars Monday, in a release that showed steep losses in some key trading divisions and revaluations in loans made by the bank.

Third quarter income grew 13 per cent compared with the previous three months, marking the second consecutive quarter of growth for the bank. Citigroup was forced to cut staff and programmes after losses incurred in the 2007 US subprime housing crisis.

'Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results,' said Chief Executive Office Vikram Pandit in a statement. 'We continued to manage our risk prudently, while growing the businesses that are core to our strategy.'

However, 1.9 billion dollars of its third quarter revenue was attributable to revaluations of its debt, a move that was called an 'accounting trick' in many US media outlets.

Without such a revaluation, the company's fixed income division's revenues stood at 2.3 billion, a 33-per-cent decline on figures a year ago. Similarly, equity market revenues fell 73 per cent to 289 million dollars against figures from the same period in 2010, again without the accounting manoeuvre.

The bank listed its total allowance for loan losses at 32.1 billion dollars, or 5.1 per cent of all its loans.