Citigroup second-quarter profit falls for older assets
Citigroup Inc said second quarter profits dropped as it lost money on the sale of a stake in a Turkish bank and suffered from the drag of its troubled assets left over from the 2007-2008 credit crisis.
Net income fell to $2.9 billion, or 95 cents per share, from $3.34 billion, or $1.09 a share, in the same quarter a year earlier, the company said.
The results included a $424 million loss from the sale of a 10.1 percent stake in Akbank TAS of Turkey and a $219 million gain from changes in the market value of its own debt and that of certain trading partners.
The company lost $920 million in Citi Holdings, where it houses bad assets from the credit crisis, compared with a $661 million loss in the same quarter last year. The company said Citi Holdings now contains 10 percent of total assets, down from 11 percent three months ago.
Excluding the debt accounting adjustments and the Turkish bank sale, earnings per share were $1.00 while net income was 1 percent lower than a year earlier, the company said. Operating expenses declined 6 percent.
Citigroup shares rose 3.4 percent to $27.55 in premarket trading.
"We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services," Citigroup Chief Executive Vikram Pandit said in a statement.
Citigroup is the third largest U.S.-based bank by assets.