US banking giant Citigroup has beaten expectations by reporting a net profit of $101m for the third quarter of this year.
Because of special dividends required from a massive US government bail-out, the results amounted to a loss for shareholders of 27 cents per share. But that was better than the expected loss of 38 cents per share.
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Citigroup has received some $45 billion in capital from the US Treasury to shore up its finances, some of which has been converted into shares. That has given the government a stake of 34% in what was once the world's biggest financial group, which is now working to slim down and repay the government.
'We continue to execute steadily against our plan, and sustainable profitability remains our primary goal in the near term,' said Vikram Pandit, chief executive. He said that while consumer credit trends were improving in international markets, the US consumer credit environment remained tough.
Citi has been drowning in losses stemming from the collapse of the US housing bubble and a worldwide financial squeeze. The company lost $18.7 billion in 2008. But Citi has posted profits over the past three quarters, even though shareholders are not seeing the benefits.
In the third quarter, the overall profit was offset by $288m in special dividends to the US government and other preferred shareholders, including foreign investment firms. Revenues rose to $20.4 billion from $16.3 billion in the same period a year ago.
Citi is still suffering losses from domestic mortgage and consumer lending. Its local consumer lending unit lost $2.1 billion in the quarter. This was offset by a profit of 2.3 billion dollars in its Citicorp unit, which includes trading, investment banking and lending outside the US.
Overall, Citi's results followed better than expected earnings from others in the ailing banking sector including JPMorgan Chase on Wednesday and Goldman Sachs earlier today.
