INSTANT VIEW: Citigroup posts fourth straight quarterly loss
NEW YORK (Reuters) - Citigroup Inc on Thursday posted its fourth straight quarterly loss, hurt by increasing credit losses and write-downs tied to complex or low quality debt.
The net loss totaled $2.8 billion, or 60 cents per share, and compared with a profit of $2.2 billion, or 44 cents, a year earlier. Revenue fell 23 percent to $16.7 billion, while expenses rose 2 percent to $14.4 billion.
Market reaction:
Citigroup shares were up 2.2 percent at $16.60 in premarket trading, trimming earlier gains of more than 5 percent.
The following is reaction from industry analysts and investors:
KEITH WIRTZ, PRESIDENT AND CHIEF INVESTMENT OFFICER OF
FIFTH THIRD ASSET MANAGEMENT:
"We're still feeling the effects of the business cycle and the slowdown of the business cycle and I also think that throughout the month of September most banks probably experienced a pullback in business activities to a greater extent because of the scare that came in the marketplace, a lot of behavior changes and probably that affected the last month of the quarter."
"I think it's a sign that Vikram Pandit, the CEO, continues on his efforts to shrink the balance sheet and reshape Citigroup during the storm that everyone is going through right now."
"Although it's a bad number (the $2.8 billion in net losses), is somewhere around what I was expecting, I think it was in line with the consensus expectations."
"This is probably a good sign of what to expect for other reports for their peer group and, lastly, I would expect the fourth quarter to be quite a challenge."
DAVE ROVELLI MANAGING DIRECTOR OF U.S. EQUITY TRADING
CANACCORD ADAMS IN NEW YORK
"It's trading up 80 cents in preopening (because) they were looking to lose 70 cents a share and they lost 71 cents, so it was basically in line and the stock's gotten killed this week."
"Noone understands what they have on their books, what they're writing down,"
"Noone can quantify this, the CEO's of their own companies can't quantify this."
MATT MCCORMICK, PORTFOLIO MANAGER AND BANKING ANALYST, BAHL & GAYNOR INVESTMENT COUNSEL, INC IN CINCINNATI
"I always said there will be two types of banks: those that survive and grab market share, and those that struggle. Citigroup is trying to position itself as being in the strong camp. They're going to be trying to tell people that they're turning the corner. But that doesn't make their job any easier. They have significant economic headwinds, and they have continued exposure to illiquid securities.
"They beat expectations this quarter, but they're not hitting the ball out of the park. It's not an investment for the faint of heart. I'd expect continued pressure and volatility for the next year at least."
(Reporting by Dan Wilchins and Leah Schnurr)
