Sun Jan 20, 2013, 11:48 AM
marmar (70,042 posts)
Citigroup Blames Gloomy Earnings On Fiscal Cliff, But Analysts Are Unconvinced
(HuffPost) The top management at Citigroup gave a dour view Thursday on the path the U.S. economy would take in 2013, saying it wasn't sure that positive trends in the employment and mortgage landscape were "sustainable." The gloominess came amid, and was partly used to excuse, disappointing quarterly results announced earlier in the day.
“As we said last quarter, we want to make sure that those trends … are sustainable,” John Gerspach, the bank’s chief financial officer, said during the conference call following the release of the financial results.
Thursday's numbers were widely panned as lackluster, with even Citi’s new Chief Executive Officer Mike Corbat telling analysts that “to be clear, we are not satisfied” with the numbers. But a big reason for the smaller-than-expected earnings was the fact that the bank's lack of confidence in the future had led it to dramatically cut the amount of profit gained from tapping its loan-loss reserves.
Banks are generally allowed by their accountants to siphon off a portion of their loan-loss reserves -- essentially a pot of money the bank holds that allows it to absorb defaults in its credit portfolio -- if they are confident improvements in the economy will mean less defaults in the future. Banks can also take advantage of the profitable accounting if their portfolio of bad loans is shrinking. In the previous five quarters, when of both those dynamics were at play, Citigroup was able to move between $600 million and $1 billion dollars each quarter, counting that amount as pure profit. By comparison, it was only able to take in a contribution of $86 million from that line item this time around. ...................(more)
The complete piece is at: http://www.huffingtonpost.com/2013/01/17/citigroup-earnings-analysts_n_2497832.html
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Citigroup Blames Gloomy Earnings On Fiscal Cliff, But Analysts Are Unconvinced (Original post)
Response to marmar (Original post)
Sun Jan 20, 2013, 02:28 PM
mbperrin (7,672 posts)
1. Banditry and corporate welfare not paying as well, Citi?
Gosh, that just makes me wanna .................... LAUGH OUT LOUD!!! HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
:catch a breath:
Gee, it's just a shame.