Citigroup returns to profit in 2009

Citigroup swung to profit in 2009 with first-quarter earnings of 1.6 billion dollars, coming back from massive losses in 2008, the troubled banking giant said Friday.
Citi, which needed special help from the US government to weather the financial crisis, returned to the black in the January-March period following losses of 5.1 billion dollars in the same period last year and 18.72 billion for all of 2008.
Citi stockholders did not get a slice of the profit due to the special share arrangements of the banking group, and took a loss of 18 cents per share but this was not as bad as analyst projections of a loss of 34 cents per share.
"Our results this quarter reflect the strength of Citi's franchise and we are pleased with our performance," chief executive Vikram Pandit said.
"With revenues of nearly 25 billion dollars and net income of 1.6 billion, we had our best overall quarter since the second quarter of 2007."
The US government owns a 36 percent stake in Citi following the latest bailout and conversion of special preferred shares to common stock.
But other Citi shareholders did not share in the profit because of dividend arrangements on the US government shares as well as other private stakes including from a Saudi prince and the Government of Singapore Investment Corporation.
Total revenues rose 99 percent from a year ago to 24.8 billion dollars and the company's interest margins rose half a point to 3.3 percent.
The results come a day after JPMorgan Chase beat analyst forecasts with a profit of 2.1 billion dollars and comments from other major banks suggest an easing of the crippling credit crisis.
The optimism has helped Citi, which saw its share price fall more than 95 percent over the past year to under one dollar, but closed at 4.01 dollars on Thursday.
AP adds: General Electric Co. said Friday its first-quarter earnings fell 36 percent on sharply lower profits at its troubled finance arm, but the results beat Wall Street forecasts in a glimmer of good news for the struggling company.
GE, which has a stake in almost every sector of the economy, from light bulbs to locomotives, posted net income of $2.74 billion, or 26 cents per share, after paying preferred dividends. That was down from $4.30 billion, or 43 cents per share, a year earlier.
Earnings from continuing operations also were 26 cents per share, surpassing the 21 cents per share forecast by analysts. GE shares rose 44 cents, or 3.7 percent, to $12.27 in pre-market trading.
Citigroup's revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though at $10 billion due to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. But in March, CEO Vikram Pandit triggered a stock market rally after he said that January and February had been profitable for Citigroup.
It was one of the first signals that the banking industry might not be as sick as many believed. Earlier that month, fears that banks would need to be nationalized sent stocks plunging to 12-year lows.