Citi Posts $4.4bn Q110 Profit on Lower Credit Losses
Citigroup (C) posted a $4.4bn net income for Q110, despite rising cash reserves for loan losses. The bank saw net credit losses decline in the third consecutive quarter, dropping 16% from the previous quarter to $8.4bn in Q110. "We are proud of our first quarter results but remain cautious about the environment, given the uncertain economic recovery and high unemployment in the US," said CEO Vikram Pandit, in a press release. "Realistically, we do not expect our performance to follow an invariable trend-line upward." Citi raised its loan loss allowance to $48.7bn, or 6.8% of loans, compared with $36bn, or 6.09% of loans in the previous quarter. Citi said the increase in loss allowance reflected the addition of $13.4bn of reserves related to the adoption of Financial Accounting Standards (FAS) 166 and 167 treatment of off-balance-sheet assets. The bank's total assets rose 8% form the previous quarter to $2trn after the adoption of FAS 166/167 added $137bn of assets onto the balance sheet as of Jan. 1, 2010. The securities and banking unit posted net income of $3.2bn, up $2.9bn from the previous quarter on strong North America and Europe, the Middle East and Africa (EMEA) business, and a decline in overall credit costs. The positive results at Citi follow the $3.2bn net Q110 income reported last week at Bank of America (BAC), as well as the $3.3bn quarterly income at JP Morgan Chase (JPM). Write to Diana Golobay. Disclosure: the author holds no relevant investment positions.