New York — Citigroup Inc.’s earnings rose 74 percent in the third quarter as more of its customers paid their bills on time, leading to lower losses from loans. An accounting gain also boosted income.
It was the seventh straight quarter of income growth for Citi, the nation’s third-largest bank by assets. Citigroup was one of the biggest recipients of taxpayer support during the financial crisis. It received $45 billion in bailouts funds and was partly owned by the government until December 2010.
The New York bank’s net income rose 74 percent, to $3.8 billion, due to lower losses from loans and an accounting gain related to the valuation of the bank’s own debt. Citi’s stock fell 1.7 percent to close at $27.93, less than other banks stocks.
The profit report came as the Occupy Wall Street movement entered its second month and spread across the country, targeting large financial institutions like Citi. As of Monday, the bank said it had not yet been approached by organizers of the protest following an offer last week from Citigroup’s CEO, Vikram Pandit, to meet with them.
Occupy Wall Street rallies started last month in New York with protests against income inequality and demands for higher taxes on the wealthy. CEOs like Pandit are prime targets. On Saturday, two dozen people were arrested after they entered a Citibank branch in New York and refused to leave.
Banks like Citi have benefited as Americans have improved their financial health, saving more and paying off their credit card debt on time. Citi’s losses from bad loans fell 41 percent during the quarter to $4.5 billion as defaults fell on Citi-branded cards. That allowed Citi to add $1.4 billion to its earnings from credit reserves it had set aside earlier in anticipation of deeper losses.
However, the bank’s ability to collect fees from raising interest rates on loans or from fees for late payments has decreased because of new regulations. That led to a 9 percent drop in revenue at its North American consumer business. Rival Wells Fargo & Co., which also released its results Monday, took a similar hit to its credit card fee income due to new banking rules.
Citi said a new regulation has also changed its plans for its private-label credit card unit, which issues cards in partnership with retail stores. Citi had said it was planning to either sell or reduce the size of the unit. The bank reversed course after noticing that customers are using retailer-issued cards more. Pandit said in an internal memo to employees the business earned $2.2 billion so far this year as delinquencies declined.
Comments
Mike_Gerhardt 1 year, 7 months ago
Unfortunately, I am sure that some poster here will write that CITIGROUP is an evil corporation that must be stripped of its earnings.
jafs 1 year, 7 months ago
Did you catch the part about the $45 billion bailout by taxpayers?
oldvet 1 year, 7 months ago
Yes, but I didn't see anything about the fact that Citibank repaid those loans.
jafs 1 year, 7 months ago
Source?
jaywalker 1 year, 7 months ago
Two years ago, jafs. Why is it you're unable to do an internet search of your own?
jafs 1 year, 7 months ago
I don't have the time or inclination to do that on all topics.
And, I think it's reasonable to ask people to document their claims.
Having done a little research on this one, it's not as clear as you might think.
First, the TARP program was not simply a loan program - the government guaranteed risky assets from the business, and bought shares in it as well.
Second, in just a few years, a business that seemingly needed a massive bailout has done well enough that we can now sell our shares of the company and get the money back.
Hmm - why did they need our help exactly? I thought they were on the verge of failure.
jaywalker 1 year, 7 months ago
Sorry, jafs, but saying you don't have the time is a crock. Instead of typing "source?" you can type in a 4 or 5 word key search. This particular subject will come right up.
I don't care about the minutia you decided to heap on here after the fact. You questioned whether the loans had been repaid. If you have a problem with the result or why they received help in the first place, ask President Obama. I'm sure his administration gave it to them for no reason whatsoever. Sheesh.
jafs 1 year, 7 months ago
As I said, they weren't in fact "loans" at all.
And, they weren't "repaid" either.
Finally, the TARP program was in fact instituted by the Bush administration.
Also, I said "or inclination".
jaywalker 1 year, 7 months ago
Fine. You're too lazy to research. They're not loans even though that's what everyone refers to them as. They weren't repaid, even though they were. And while TARP was started under Bush, Citigroup didn't receive backing until the Obama administration authorized it.
For someone who supposedly wishes to have productive conversations you have an odd way of showing it. I don't have a problem with someone asking for citation for spurious claims, much like bozo's tripe below. But if it's as simple as "elephants are gray" and you don't feel "inclined", well, that's a you problem.
jafs 1 year, 7 months ago
I certainly hope you're not going to continue insulting me, as that would mean I'd have to stop talking with you.
I have never engaged in that practice with you, or anybody else, for that matter, so I'd appreciate it if you'd stop.
This is my point - I've already had to spend more time and energy researching this than I would have if the fellow had furnished a source.
The situation is complicated - some of the money Citigroup got was in fact a credit line of the US Treasury, but other money was essentially a government purchase of their stock.
At first, the stock was "preferred", which incurs some obligation on the company's part, but they managed to switch it to "common", which has no such obligation.
Big picture - the company made a bunch of stupid, perhaps fraudulent, decisions, and when they got into trouble, they convinced the US government (us) to bail them out.
We did so, and the result was that their business stabilized, and did well enough that we could recover our investment.
Sounds like we did them a pretty huge favor to me.
jaywalker 1 year, 7 months ago
I apologize if you felt insulted, though I feel you're being a tad too sensitive. I responded to your 'source?' request and you digressed the subject, which seems to happen quite often when I engage with you. Your post preceding this last was not productive engagement, it was merely obfuscation. My sarcastic response probably had more to do with having to deal with the likes of bozo and gandalf than yourself, and for that I again apologize, but I'd appreciate an honest reply myself rather than a dispersal of the actual subject.
jaywalker 1 year, 7 months ago
And not for nothin', I agree we did them a gigantic favor and I believe TARP was a bad move from the start.
jafs 1 year, 7 months ago
Thank you.
What's the point for you exactly?
I asked for a source, and you responded that I should look it up myself.
Ok - you're entitled to your opinion.
I don't really see any conversation there myself.
Actually, you asked sarcastically why I'm "unable to do an internet search"?
What kind of conversation do you expect will follow from that sort of thing?
jaywalker 1 year, 7 months ago
Keyword search: 'Citigroup pays back TARP'
Didn't expect a conversation then. Hoped you'd learn to research on your own.
jafs 1 year, 7 months ago
For me, the subject was, and still is, Citigroup.
Folks who like to praise private sector businesses and criticize the government praise Citigroup and others for "paying back" their loans.
That neatly ignores the fact that it's more complicated than that - the government stepped in and rescued these businesses, often by buying toxic assets that nobody else would, and assuming a great deal of risk.
Then, the businesses stabilized, and the government was able to get some (almost all, I think) of their investment back.
It worked out ok, but it very well might not have, and taxpayers would have lost their investment.
jaywalker 1 year, 7 months ago
I don't disagree with any of that. Like I said, I thought it was a bad move from the start.
Crazy_Larry 1 year, 7 months ago
Citibank received $25-billion in TARP funding from BushCo and another $20-billion from ObamaCo.
"Over the past several decades, the United States government has engineered at least four different rescues of the institution now known as Citigroup. During the most recent tax-payer funded rescue, by November 2008, Citigroup was insolvent, despite its receipt of $25 billion in federal TARP funds, and on November 17, 2008, Citigroup announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made during 2008 in a huge job cull resulting from four quarters of consecutive losses and reports that it was unlikely to be in profit again before 2010."
Crazy_Larry 1 year, 7 months ago
25 People to Blame for the Financial Crisis http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877339,00.html
Agnostick 1 year, 7 months ago
Flip side: Why is it so difficult to post a link to a news report or research to back up your claims?
I generally post links to everything I quote or reference. It's the courteous thing to do, it shows respect for the authors of the original material, and it offers an easy backup to my argument. Takes maybe three seconds to do.
Neither do I plagiarize someone else's material and present it as my own, like FalseHopeNoChange and other posters. And snidely adding "(from a source)" just shows disrespect for the person that wrote the original material.
Could it be, jaywalker, that you're simply too lazy and apathetic to do the right thing?
Agnostick agnostick@excite.com
jaywalker 1 year, 7 months ago
Perhaps you wouldn't leap in like a jackass, Agno, if you'd cared to start at the top of this string. It wasn't me that didn't include a source. And I, too, cite when appropriate.
Like I said before, I don't really care if someone doesn't include a source if the assertion is easily verifiable with a short, common sense keyword search. Finding out if Citigroup paid back TARP takes two seconds, as much time as it does to request another poster to provide citations. Now, when someone like the resident clown below or FalseHope or any number of others on here start making questionable assertions (i.e. bozo: "They only repaid them because they didn't want any restraints on the 7 to 9 figure salaries for their executives as they throw people out of their houses."), then I'll request citation.
oldvet 1 year, 6 months ago
Source:
http://www.reuters.com/article/2009/12/23/us-financials-tarp-idUSTRE5BM42I20091223
just_another_bozo_on_this_bus 1 year, 7 months ago
They only repaid them because they didn't want any restraints on the 7 to 9 figure salaries for their executives as they throw people out of their houses.
jaywalker 1 year, 7 months ago
Oh. Not because it was a loan and you're obligated to pay it back? Odd.
just_another_bozo_on_this_bus 1 year, 7 months ago
The loans were made to stabilize the banks that got them. But the banks repaid them before they were actually stabilized for the reason I cited above.
jaywalker 1 year, 7 months ago
Right. Because YOU know.
just_another_bozo_on_this_bus 1 year, 7 months ago
If you don't know, it's because you think that willful ignorance makes you seem like you're in the mythical reasonable middle ground.
jaywalker 1 year, 7 months ago
Fine. Then cite your proof they paid the loans back so they could foreclose and keep their bonuses. I'm betting that challenge will be the end of this string.
Crazy_Larry 1 year, 6 months ago
"As the chaos from the financial crisis has subsided, many banks have become eager to throw back the government’s lifeline — partly as a sign of strength, but also to rid themselves of the additional oversight, including curbs on executive pay, that came with it."
"But after banks return the TARP money, the administration will forfeit much of its leverage over them. With that loss goes a rare opportunity to overhaul the industry. The administration’s ability to push institutions to purge themselves quickly of bad assets and do more to help hard-pressed homeowners will be diminished."
"The banks are eager to escape TARP and the restrictions that come with it, particularly the limits on how much they can pay their 25 most highly compensated workers."
http://www.nytimes.com/2009/06/10/business/economy/10tarp.html
just_another_bozo_on_this_bus 1 year, 7 months ago
And many of those who got loans didn't use the proceeds to make new loans and stimulate the economy-- they instead either used it for further speculative investments, or bought US bonds which required the taxpayers to pay them interest on their own money.
gl0ck0wn3r 1 year, 7 months ago
Evidence?
jaywalker 1 year, 7 months ago
He won't be back, or at least he won't post again. And if so, it certainly won't be with evidence.
jafs 1 year, 7 months ago
You could, of course, look it up.
If you do, you may find bozo is correct - although one of the stated purposes of TARP was to stimulate lending, the government didn't require it.
So, banks looked at the money as something they could do anything they liked with, and acted accordingly.
jaywalker 1 year, 7 months ago
Perhaps it's a reading comprehension problem you're suffering from, jafs? In any case, if you wish not to be insulted, I'd recommend not being snide.
Alex Parker 1 year, 7 months ago
Let's stay on topic, folks.
voevoda 1 year, 7 months ago
Citigroup isn't evil, but with all their profits, they are in an ideal position to give to charities that help the poor. The corporation can give, and so can its executives individually. If they do what Bill Gates does, then they won't be identified as greedy. And at the same time, they can cut their tax obligations, too.
If they don't want to pay taxes and they don't want to give to charity, then they are plain greedy. I don't have a lot of sympathy for greedy people.
Mike_Gerhardt 1 year, 7 months ago
CITIGROUP is in no way, obliged to "give" money to anyone. Besides, it would never be enough to satisfy the left in this country.
parrothead8 1 year, 7 months ago
I didn't read where voevoda said Citigroup was "obliged" to give money away. Perhaps you could point that part out? I did read something about them being "in an ideal position" to help, which would be nice, especially after taxpayers helped them out in their time of need. Instead, they jack up fees on simple checking accounts to boost their already insanely-high profits.
cato_the_elder 1 year, 7 months ago
Voevoda says: "I don't have a lot of sympathy for greedy people."
Not unless they're greedy for government handouts.
madameX 1 year, 7 months ago
Or at the very least pay their account holder a better interest rate, or pay their lower-level employees a better wage...
jaywalker 1 year, 7 months ago
Slow down and check your facts before starting a diatribe, voe. Citigroup and their employees are deeply involved in philanthropy around the globe. Pretty impressive record as a matter of fact.
gl0ck0wn3r 1 year, 7 months ago
Define greedy. How do you know Citigroup doesn't do anything with charities?
tomatogrower 1 year, 7 months ago
Or they could give their employees who are low on the totem pole a raise, or hire more to relieve the work load. Create jobs.
Agnostick 1 year, 7 months ago
Quote:
Citi's charitable foundation scaled back its budget sharply during the downturn, but it also trimmed its costs.
"We undertook a broad review of everything we did and decided to be very crisp in our mission and our focus areas and had completed that review by the time the financial crisis hit," said Pam Flaherty, the director of corporate citizenship at Citigroup and the president and chief executive of the Citi Foundation. "We also went through a process of streamlining how we run our operations to improve our quality and our timeliness."
Citi decided to focus its resources on areas such as economic empowerment and financial inclusion of lower-income individuals and families; microfinance; enterprise development; and asset building. One where it reduced the number of commitments was education.
"We did a lot of different things in education, but we didn't have a single-minded focus," Flaherty said. The foundation decided to concentrate on improving individuals' access to college.
Of course, giving up commitments is not easy.
"You do it with sensitivity," Flaherty said. "You don't do it all at once and you ... figure out how you implement that change over a period of time."
Overall the picture is improving. Citi increased its charitable giving last year by 23%, to $116.3 million.
Source: http://blogs.cfed.org/cfed_news_clips/2011/03/banks-give-more-manhours-less.html
Taking a somewhat cynical look at all this, the title of the referenced article, "Banks Give More Man-Hours, Less Money, to Philanthropy", is very telling.
Let's say you're giving money: Donations are collected, CEO does a walk-on during The Jerry Lewis Show. "This year, we raised $800,000 for your kids, Jerry."
"Thank you so much, Don. Tympani!!"
Probably very few people watched that, and it probably won't make the local papers.
Now, contrast that to an event where you have to show up and do something.
The lower-level slobs show up at 7am Saturday to help set up the tables, fill water cups, etc. (whatever needs to be done). CEO and VPs show up right at the start of the event (assuming it's not raining), chat up the reporters, get in some photos and soundbites with the local media...photos are printed in the "Society" page in Sunday's newspaper.
The Golden Boys and Girls vaporize after about an hour (can't keep The Hamptons waiting!)... lower-level employees finish stacking chairs and picking up trash at 3:30pm, maybe 4:00.
Costs a lot less than $800K, but the images are priceless.
Agnostick agnostick@excite.com
jafs 1 year, 7 months ago
Read Artilce 1, Section 8 of our constitution.
jafs 1 year, 7 months ago
That's an un-American thought.
If the founders had meant to create a libertarian society, they would have done so.
They did not.
Alceste 1 year, 7 months ago
Only 74%?
Agnostick 1 year, 7 months ago
Quote:
"Federal assistance
"Over the past several decades, the United States government has engineered at least four different rescues of the institution now known as Citigroup. During the most recent tax-payer funded rescue, by November 2008, Citigroup was insolvent, despite its receipt of $25 billion in federal TARP funds, and on November 17, 2008, Citigroup announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made during 2008 in a huge job cull resulting from four quarters of consecutive losses and reports that it was unlikely to be in profit again before 2010. On the same day, Wall Street responded by dropping its stock market value to $6 billion, down from $300 billion two years prior. As a result, Citigroup and Federal regulators negotiated a plan to stabilize the company and forestall a further deterioration in the company's value. The arrangement calls for the government to back about $306 billion in loans and securities and directly invest about $20 billion in the company. The assets remain on Citigroup's balance sheet; the technical term for this arrangement is ring fencing. In a New York Times op-ed, Michael Lewis And David Einhorn described the $306 billion guarantee as "an undisguised gift" without any real crisis motivating it. The plan was approved late in the evening on November 23, 2008. A joint statement by the US Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp announced: "With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy."
"Citigroup in late 2008 held $20 billion of mortgage-linked securities, most of which have been marked down to between 21 cents and 41 cents on the dollar, and has billions of dollars of buyout and corporate loans. It faces potential massive losses on auto, mortgage and credit card loans if the economy worsens.[citation needed] [This paragraph requires a reference, particularly to the $20 billion figure quoted above. It is likely that this number is a severe underestimate of the value of CDO holdings held in off-balance sheet SIVs.]
"On January 16, 2009, Citigroup announced its intention to reorganize itself into two operating units: Citicorp for its retail and institutional client business, and Citi Holdings for its brokerage and asset management. Citigroup will continue to operate as a single company for the time being, but Citi Holdings managers will be tasked to "tak[e] advantage of value-enhancing disposition and combination opportunities as they emerge", and eventual spin-offs or mergers involving either operating unit have not been ruled out. On February 27, 2009 Citigroup announced that the United States government would be taking a 36% equity stake in the company by converting $25 billion in emergency aid into common shares.
"Citigroup shares dropped 40% on the news.
[more]
Agnostick 1 year, 7 months ago
"On June 1, 2009, it was announced that Citigroup Inc. would be removed from the Dow Jones Industrial Average effective June 8, 2009, due to significant government ownership. Citigroup Inc. was replaced by Travelers Co.
"Return to profitability, non-governmental shareholder ownership
"In 2010, Citigroup achieved its first profitable year since 2007. It reported $10.6 billion in net profit, compared with a $1.6 billion loss in 2009. Late in 2010, the government sold its remaining stock holding in the company, yielding an overall net profit to taxpayers of $12 billion."
Source: http://en.wikipedia.org/wiki/Citigrou...
Visit the link; the above quote is peppered with several references, links to other reports, etc. Wikipedia is not meant to be the singular, perfect source--just a starting place to guide you to deeper resources.
Agnostick agnostick@excite.com
jafs 1 year, 7 months ago
Thanks.
It's interesting, and more complex than people seem to think.
For example, the government bought and then eventually sold stock in the company - that's rather different from making a loan and getting it paid back with interest.
Also, what happened to the original $25 billion from the first TARP program - the one that wasn't enough?
jaywalker 1 year, 7 months ago
Sweet cheese and rice..............
deec 1 year, 7 months ago
It's lovely that we bailed out the con men at Citi over and over again. They'll pay $258 million in fines for this scam, but only earned $160 million on it. Of course, if they hadn't got caught, that $160 million would be profit. http://www.bbc.co.uk/news/business-15375111
merrill 1 year, 7 months ago
More fraud: The problem is "once the money left the building, the government(Bush Admin) lost all track of it.
The beginning banks, the first nine, the big banks, they all got their money one day after a meeting with Henry Paulson, in which he told them, “You’re taking this money.” But after that, the process was much more convoluted. And some banks lobbied for the money. Others banks didn’t lobby for the money but were told they were taking it. It all — what we basically concluded early on, that there was really no plan to this at all. While Treasury said that the purpose was to get credit flowing back into the system, the fact of the matter is, the way they went about this made no sense at all.
There were just a handful of institutions that were terribly weakened. AIG the insurer, Bank of America, Citigroup, those three were clearly in very weakened form. So, many of the other big banks were not." http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year
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