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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, 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". |
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