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Citigroup earnings down on slow business Citigroup earnings down on slow business
(40 minutes later)
Citigroup's net earnings for the first three months of the year have fallen to $3bn (£1.8bn), down 32% from a year ago.Citigroup's net earnings for the first three months of the year have fallen to $3bn (£1.8bn), down 32% from a year ago.
The result was sapped by falling revenues, down 22%, with the firm's investment bank hardest hit.The result was sapped by falling revenues, down 22%, with the firm's investment bank hardest hit.
New lending remained weak, as the government-rescued bank struggled to shrink a balance sheet that was bloated during last decade's credit boom.New lending remained weak, as the government-rescued bank struggled to shrink a balance sheet that was bloated during last decade's credit boom.
But the US banking giant's bad debt position improved during the quarter.But the US banking giant's bad debt position improved during the quarter.
The $3.2bn it set aside to cover potential future losses on new lending was down 63% from a year earlier. The $3.2bn it set aside to cover potential future losses on new lending was down 63% from a year earlier, href="http://www.citigroup.com/citi/press/2011/110418a.htm?utm_campaign=110418EarningsAlertBar" >according to its first quarter results.
The bank was also confident enough to release $3.3bn from its reserves against existing questionable debts it owns.The bank was also confident enough to release $3.3bn from its reserves against existing questionable debts it owns.
That was in sharp contrast with rival Bank of America, whose first quarter results were hit by an unexpected rise in bad debts at its mortgage lending business.That was in sharp contrast with rival Bank of America, whose first quarter results were hit by an unexpected rise in bad debts at its mortgage lending business.
"[The Citigroup results] show the healing process has begun, but it continues to be slow across the industry," said Michael Holland of brokerage Holland & Co."[The Citigroup results] show the healing process has begun, but it continues to be slow across the industry," said Michael Holland of brokerage Holland & Co.
Markets took the news well, having expected Citi's earnings figure to come in about 10% lower than it did.
Shares in the bank rose 0.7% in early New York trading, outperforming the broader stock market, including most other bank stocks, which fell sharply after S&P revised the US government's credit rating outlook to "negative".