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Citi profitable in first two months this year: Report
March 10, 2009 18:57 IST
Banking major Citigroup has been profitable in the first two months of this year and reaped revenue of over $19 billion, a media report said.
According to a report in Financial Times, Citi chief executive Vikram Pandit in an internal memo to the staff tried to allay fears over debt and its share price, which is hovering around one dollar. The daily quoted Pandit as saying in the memo that 'we were profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.'
Pandit added that in January and February alone -- two months in which investment banks did well because of a partial thawing of credit markets -- the bank generated revenues of $19 billion before markdowns, FT stated in a report published online.
Pandit has reiterated that a planned capital injection by the US government and other investors would strengthen its balance sheet.
The deal with US government would turn the federal authorities into Citi's single largest shareholder with a stake of up to 36 per cent, it added.
Citi has suffered five consecutive quarters of multi-billion-dollar losses on huge credit-related writedowns. Executives have pinned their hopes of dispelling market concerns over its survival on recording a profit in the first three months of 2009.
The memo stated that Citi's deposits were 'relatively stable.' Further, the company's executives have said they have not noticed any significant deposit flight during the company's prolonged travails, the FT report said.
Citi has conducted its own stress test, using tougher assumptions on the scale of the economic downturn than those to be adopted by the US government and was confident of its capital strength.
Pandit also addressed some investors concerns over Citi's ability to reap the benefits of billions of dollars in deferred tax assets.
'Even if economic conditions deteriorated significantly, Citi would be able to take advantage of the majority of those assets, boosting its balance sheet,' the memo said.