Indian American CEO Panadit's Citigroup makes profit with India SaleApril 20, 2012 13:16
Profits at Citigroup led by Indian American CEO Vikram Pandit rebounded to $2.9 billion in the first quarter of 2012 with revenue boosted by the sale of some stakes in India and China.
That meant a drop of 2 percent compared to the same quarter last year, but a big jump on the bank's profit of $1.2 billion in the fourth quarter of 2011 when financial markets were floundering under the effects of the Eurozone financial crisis.
Revenues rose 4 percent to $20.7 billion as the US banking giant made $1.1 billion on the sale of its remaining stake in India's Housing Development Finance Corporation and $542 million of its stake in Shanghai Pudong Development Bank.
But chief executive Vikram Pandit was cautious about the recovery.
"While the operating environment improved in the first quarter, there is still much macro uncertainty and we will continue to manage risk carefully," he said in New York.
"Our unique global footprint gave us a meaningful competitive edge," Pandit told analysts.
"Global consumer banking, our largest business, produced another quarter of good growth in revenues, net income and key drivers like loans and deposits," he added.
The bank took charges of $1.3 billion during the quarter after revising down the value of its debt and derivatives, which it blamed on the "tightening of Citi's credit spreads", meaning their bets on their own creditworthiness.
Citigroup's total allowance for loan losses was $29 billion, or 4.5 percent of total loans, compared with 5.8 percent in the same period last year.
Citi's customers in emerging-market countries also took out more loans. Revenue from consumer lending grew 6 percent in Latin America and 5 percent in Asia.
Citi's first-quarter results extended a string of profits reported by the bank in the last two years.