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Bank Results Season: Citi finally Stripped of Dignity, cries for shame

English: Vikram Pandit, Chief Executive Office...

English: Vikram Pandit, Chief Executive Officer, Citi, USA; Co-Chair of the World Economic Forum on Latin America, captured during the World Economic Forum on Latin America in Rio de Janeiro, Brazil, April 29, 2011. (Photo credit: Wikipedia)

Vikram Pandit’s Citi turned out to be a bad dream for everyone despite the early lead throughout the crisis and an early and clean attrition of its own bad debt . th elatest quarter strips its EPS of $1.06 or $3.37 B expected profit with a $4.7B revenue impact from Morgan Stanley’s repurchase of Smith Barney and another $770 M from its DVA/CVA hoit of the value of its own debt rising in the market, brought it to a pre tax loss of more than a $900 m before Income Tax benefits of nearly $1.5 B helped it post $524 M profit or 16 cents per share from continuing operations. Discontinued ops ( run off portfolio) has mostly been taken care of, the loans adding only $31 m in losses to this figure to bring Citi to an abysmal W15 cents per share EPS likely its continuing tale from here despite the rejuvenating mortgage markets as it is rid of almost $3B in quarterly operations from the inconvenient Smith Barney operations which fetched Citi a valuation of $13 B on the latest tranche sold to Smith Barney

Tier I Common is as high as 12.7% making the coming Basel II requirements a ready platform for the bank to get a new deluge of credit business as it has a Basel III readiness to Tier I of 8.6% against around 7% required by it after top up Capital under the Dodd Frank acts as approved by the US regulators

The Balance sheet is currently stable at $1.9 T over the three quarters of 2012 with Citi being one of the largest national employers right now at 262,000 employed staff including employees at its Emerging Market Franchises which do 50% of the Consumer Banking volumes The $13.9B topline contributes to a nine month total now lagging at $51.99 B as NII is still a strong $35.453 B and gains on investments booked have increased by another $615 M to $2,885 M YTD.

As of now insurance income of $1.872 B in premiums for the nine months is still a part of the Citicorp report card . Fee based income is nearly $4.3 B for the quarter excluding the losses on MSSB. Another $1.5 B was released from loan reserves for the quarter

The Net income of $468 M is a drop of 84% sequentially and on year

GCB revenue in North America (US) at $5.4 B is 54% of the Banks $10 B topline from the retail business while Securities and Banking revenue is more evenly spread with less than athird coming from its North America operations. Transaction Banking for global corporations bring in $2.658 B in Topline additions. US retail operations are still more profitable than the ROW Meanhat $1.3 B in Income against 850 M from the rest of the world which drops to 20% for Trading and Investment Banking and 14% in Transaction Banking operations

Bad Bank Citi Holdings assets are down to $171 B this quarter dropping a third in a year and drive less than a $1 B in revenues

Meanwhile the management gets together at 11 AM to defend the business using the basis of a ex MSSB +CVA topline of $19.4 B ($18.4 B at Citicorp) and making the rounded up excuses for substituting profits for MSSB exit from the portfolio

 

 

 

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One comment on “Bank Results Season: Citi finally Stripped of Dignity, cries for shame

  1. Pingback: Results season claims interesting victim at Citi | Banking Insight | The Banking and Strategy Initiative

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