Citigroup net hit by $2 billion in charges

Jan 18 2013, 01:54 IST
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SummaryEven with the charges, though, Citigroup reported higher fourth-quarter profit on Thursday as trading revenue rebounded from a year earlier.

Citigroup Inc posted $2.32 billion of charges for layoffs and lawsuits in its first financial report under its new chief executive, Michael Corbat, who cautioned that the bank needs more time to deal with the problems it faces.

Even with the charges, though, Citigroup reported higher fourth-quarter profit on Thursday as trading revenue rebounded from a year earlier.

Corbat, who took the reins in mid-October after predecessor Vikram Pandit was ousted, said in a statement that Citi’s various businesses were combating problems including regulatory changes, as well as issues dating to the financial crisis that continue to plague the bank and its peers.

“It will take some time to work through the challenges of the current environment,” he said, adding that the bank’s “critical goals” included improving its return on assets.

Fourth-quarter net income was $1.2 billion, or 38 cents a share, compared with $956 million, or 31 cents a share, in same quarter of 2011.

Results were reduced by new legal costs of $1.29 billion, or 27 cents a share, and a previously announced corporate restructuring charge of $1.03 billion, or 21 cents a share.

On a conference call, Citigroup Chief Financial Officer John Gerspach said $500 million of the new legal costs came from what he called a variety of issues in the ongoing US consumer banking business.

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