Citigroup Q4 profit slips 11%

Citigroup Q4 profit slips 11%
US banking giant Citigroup on Tuesday reported an annual 11 per cent decline in fourth quarter,2011 net profit as trading and investment banking income tumbled amid financial market turmoil.

The bank posted a net income of USD 1.17 billion in the October -December 2011 period, down from the USD 1.3 billion reported in the year ago period.

Revenue fell by 7 per cent to USD 17.17 billion in Q4, 2011, compared to the same period in the previous year, the bank said. This was the lowest revenue posted by it since the fourth quarter of 2008, when the global financial crises was at its peak.

Trading revenue excluding accounting adjustments slumped 37 per cent in Q4,2011, compared to the year ago period. Investment banking revenue plunged by 45 per cent in the same period.

The Eurozone debt crises, financial market turmoil, slowdown in the US economy and new regulations have hit the investment banking and trading income of US banking giants including Citigroup in the recent months.

The bank reported a drop in earnings per share to USD 0.38 per share in Q4,2011 from USD 0.43 per share in the same quarter in 2010.

Vikram Pandit, Citi's Chief Executive Officer, said, "Overall, we made solid progress in 2011. We increased our net income to $11.3 billion, up 6% from the previous year; the macro environment has impacted the capital markets".

Declining trading and investment banking incomes are forcing global banks to slash thousands of jobs to cut costs, restructure operations and restore profitability.

Citigroup said that it will eliminate 5,000 jobs, with 25 per cent coming from its securities and banking business amid a worsening outlook.

Banking experts reckon that the US banking industry faces an uncertain near-term outlook amid slowing growth, global headwinds and stricter capital regulations.

Shares of Citigroup tumbled 8.21 per cent to end at USD 28.22 in New York trading on Tuesday amid weaker than expected earnings.

Dion Global Solutions Ltd

Read more about: revenue, results, euro zone, citigroup
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