Citigroup records profit, breaking six quarter slump
By DPA, IANSFriday, July 17, 2009
NEW YORK - The sale of its controlling stake in a brokerage helped Citigroup Friday to surprise analysts and announce $4.3 billion of net income in the second quarter of 2009, after six quarters of falling ever further into the red.
However, the fact that the entire uptick into positive numbers was due to its decision to merge the Smith Barney brokerage into a joint venture to be controlled by Morgan Stanley, created questions as to whether the company could continue to earn profits in the near term.
The Smith Barney sale netted the company $11.1 billion in pre-tax and $6.7 billion after taxes.
The company recorded total second quarter revenues of $30 billion, an increase of $12.4 billion from the corresponding period in 2008.
Operating expenses dropped $12 billion, or 21 percent, compared with the second quarter of 2008. Additionally, Citigroup shed 30,000 positions since the first quarter of 2009, bringing its staffing to 279,000.
“Our financial results today reflect the incredibly dedicated efforts of all of our people around the world and their success in implementing our plan,” said Vikram Pandit, the bank’s chief executive officer.
“We remain optimistic that the turnaround of Citi will gain speed.”
