Alexa

Citigroup records January, February profits: CEO

Citigroup records January, February profits: CEO

Citigroup Inc was profitable in the first two months of 2009 and is confident about its capital strength, Chief Executive Vikram Pandit said, easing concerns about the bank's survival prospects and sending its shares up 38.1 percent.
"I am most encouraged with the strength of our business so far in 2009," Pandit wrote in a memo to staff on Monday. "We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007."
The assessment may increase pressure on Pandit to deliver a first-quarter profit at Citigroup, following five straight quarterly losses totaling about US$37.5 billion. Citigroup earned US$2.2 billion in the July-September period in 2007, the last quarter it made money. Analysts, on average, expect it to post losses through September. Pandit became chief executive in December 2007.
"You can't say the first two months were the best since 2007, and then blame March later," said Ralph Cole, who helps invest US$2 billion at Ferguson, Wellman Capital Management in Portland, Oregon. "Pandit is putting his own credibility on the line. This absolutely raises the bar."
Citigroup shares closed up 40 cents at US$1.45, the biggest one-day percentage gain since Nov. 24.
Bank shares were bolstered after Rep. Barney Frank, head of the House Financial Services Committee, said U.S. regulators plan to soon restore the "uptick" rule, which prevents investors from selling a stock short while it is falling.
Citigroup has blamed short-sellers, who bet that stocks will fall, for some of the drop in its own share price, which last week fell below US$1 for the first time.
Since October, New York-based Citigroup has received two federal bailouts, US$45 billion of capital from the Treasury Department's Troubled Asset Relief Program, and a government agreement to cap losses on US$300.8 billion of troubled assets.
Last month's bailout would make the government Citigroup's largest shareholder, with a potential 36 percent stake. U.S. regulators are working on a contingency plan to stabilize Citi if problems mount.


Updated : 2021-01-26 20:45 GMT+08:00