Citi's quarterly profit surges 24 pc to $3.34 bn

Citi's quarterly profit surges 24 pc to $3.34 bn

Once on the brink, Citi -- under stewardship of Vikram Pandit -- has now reported six straight quarters of profit. The banking giant, which had received billions of dollars worth American taxpayers' money to tide over the financial meltdown two years ago, had raked in a net profit of USD 2.69 billion in 2010 June quarter.

However, Citi's revenues in 2010 June quarter dropped seven per cent to USD 20.6 billion. In the year-ago period, the same stood at USD 22.07 billion. "Total cost of credit in the second quarter fell 49 per cent to USD 3.4 billion," Citi said.

"The improvement in credit costs was driven by a 35 per cent decline in net credit losses to USD 5.1 billion and a USD 2 billion release of credit reserves, reflecting a lower level of inherent losses remaining in the portfolio," it added.

Further, the company's revenues from investment banking climbed to USD 1 billion for three months ended June 2010 from USD 592 million in the same period a year ago.

Citi's India-origin chief Pandit said the entity achieved another solid quarter of operating performance. "We produced growth in both loans and deposits in Citicorp, reduced assets in Citi Holdings, continued to invest in our core businesses and improved our financial strength," Pandit noted in a statement.

Even though the near-term macroeconomic outlook is uneven, Pandit stressed Citi is "consistently profitable". During 2010 June quarter, Citi's operating expenses rose nine per cent to USD 12.9 billion, due to various factors including impact of foreign exchange translation and volume-related expenses in Citicorp.

To improve its overall business, Citi had split itself into two -- Citicorp and Citi Holdings. Revenues of Citicorp -- which holds the group's core assets -- declined marginally to USD 16.3 billion in the 2011 June quarter, mainly on account of fall in revenues from Securities and Banking and North America RCB.

Citi Holdings, comprising non-core assets intended for sale, saw its revenue drop 18 per cent to USD 4 billion as against the year-ago period. "The decline in Citi Holdings revenues was principally due to the ongoing declines in assets, which fell 34 per cent from prior year period to USD 308 billion.

"Since reaching its peak in the first quarter of 2008, Citi Holdings assets are now over half-a-trillion dollar lower," the statement said.

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