Banking behemoth Citigroup has posted profits of $101 million for the third quarter, even as the partially US government-owned entity saw its credit losses remain at high levels.
Citi has swung into the black in the latest quarter as compared to a loss of $2.82 billion in the corresponding period a year ago.
However, the continuing credit losses which stood at $8 billion has cast a shadow on the health of the banking major which has been severely hit by the financial meltdown. Further, Citi had profits to the tune of $4.28 billion in the second quarter of this year.
In a statement, Citi said third quarter profit stood at $101 million, while shareholders have incurred a loss of 27 cents per share.
"During the third quarter, Citigroup completed its previously announced exchange offers. This resulted in an $851 million after-tax gain, but also in a $3.1 billion reduction in income available to common shareholders, resulting in an incremental net $0.18 loss per share.
Citi's India-origin Chief Executive Officer Vikram Pandit said with the completion of the exchange offers and the "significant actions taken during the last few quarters have created a strong foundation".
Revenues for the September quarter soared to $20.39 billion as compared to $16.26 billion in the same period a year ago.
To tide over the raging financial crisis, Citi had received $45 billion in fresh capital from the US apart from the administration guaranteeing its assets worth over $300 billion. Currently, the government holds about 34 per cent stake in the entity.
"Net credit losses remained elevated at $8 billion, but were down from $8.4 billion in the prior quarter. Managed credit losses were $11 billion, down from $11.5 billion in the prior quarter," Citi noted.
The entity's credit costs stood at $9.1 billion in the third quarter, lower than $12.7 billion reported in the previous quarter.
Meanwhile, Citicorp business reported a profit of $2.3 billion from continuing operations, while CitiHoldings recorded a loss of $1.8 billion from continuing operations.
In the third quarter, deposits stood at $833 billion, up $28 billion from the second quarter of 2009. "Deposit growth was strong in both Transaction Services and Regional Consumer Banking," the statement said.
Pandit pointed out that Citi's client franchise continues to perform well. "Customer deposits grew $28 billion during the quarter... We are also seeing increased customer activity in our Global Consumer business."
"Looking forward, we will continue to focus on sustainable profitability and growth, repaying TARP and helping support America's economic recovery."
As part of efforts to shrink the balance sheet, Citi has been selling assets worldwide and recently sold its profit-making commodities trading unit Phibro.
