Citigroup has reported higher third-quarter earnings as the bank set aside less money to cover bad loans and recorded an accounting gain banks can take in turbulent markets.
Citigroup, the third-largest US bank by assets, reported net profit of $3.8 billion, or $1.23 per share, up 74% from $2.2 billion a year earlier.
The latest results included a pre-tax gain of $1.9 billion due to the bank's widening credit spreads during the quarter. When a bank's debt weakens relative to US Treasuries, it can record an accounting gain because it could profit from buying back debt.
The bank - which received two US government bail-outs at the height of the financial crisis - is seeing its problem loan portfolio shrink. Non-accrual loans fell to $7.95 billion from $12.46 billion in the same quarter last year.
