Bank in profit: the City cheers
Shares around the world soared tonight after banking giant Citigroup shocked investors by declaring it had returned to profit.
The troubled Wall Street firm, which has received $60 billion in bail-outs from the US government and is a major London employer, said it was profitable in the first two months of this year.
It fuelled hopes that the worst of the banking crisis could be over and sent shares soaring on both sides of the Atlantic after weeks of carnage.
The FTSE 100 index was up 134.55 to 3676.95 but was still down nearly 20 per cent this year.
The Dow Jones Industrial Average rose 254.32 to 6801.37 in New York.
The bounce came after a bullish email from Citigroup chief executive Vikram Pandit to staff was leaked.
It said: "I am most encouraged with the strength of our business so far in 2009.
"In fact, we are profitable through the first two months and are having our best quarter-to-date performance since the third quarter of 2007."
He said the bank was confident about its capital strength after it had done stress tests using assumptions that were more pessimistic than those of the US Federal Reserve.
"Our client businesses are strong, our deposits are relatively stable and we continue to provide credit to consumer and corporate customers," Pandit told staff.
"You have all done a very impressive job driving revenues and reducing our cost structure, and it is gratifying to see the results first-hand."
But analysts warned the profits did not include billions of dollars of write-downs on toxic assets.
Citigroup has axed 75,000 jobs since the start of the credit crisis including thousands at its Canary Wharf offices.
Mr Pandit said revenues hit $19 billion in January and February — almost equalling the $21 billion for the entire first quarter last year.
Citi recently turned to the US Government for a third bailout as it struggles to survive the carnage in financial markets.
The bank, created by the $85 billion merger of Citicorp and Travelers Group in 1998, will be 36% owned by the US taxpayer.
http://www.thisislondon.co.uk/standa...ers/article.do
Shares around the world soared tonight after banking giant Citigroup shocked investors by declaring it had returned to profit.
The troubled Wall Street firm, which has received $60 billion in bail-outs from the US government and is a major London employer, said it was profitable in the first two months of this year.
It fuelled hopes that the worst of the banking crisis could be over and sent shares soaring on both sides of the Atlantic after weeks of carnage.
The FTSE 100 index was up 134.55 to 3676.95 but was still down nearly 20 per cent this year.
The Dow Jones Industrial Average rose 254.32 to 6801.37 in New York.
The bounce came after a bullish email from Citigroup chief executive Vikram Pandit to staff was leaked.
It said: "I am most encouraged with the strength of our business so far in 2009.
"In fact, we are profitable through the first two months and are having our best quarter-to-date performance since the third quarter of 2007."
He said the bank was confident about its capital strength after it had done stress tests using assumptions that were more pessimistic than those of the US Federal Reserve.
"Our client businesses are strong, our deposits are relatively stable and we continue to provide credit to consumer and corporate customers," Pandit told staff.
"You have all done a very impressive job driving revenues and reducing our cost structure, and it is gratifying to see the results first-hand."
But analysts warned the profits did not include billions of dollars of write-downs on toxic assets.
Citigroup has axed 75,000 jobs since the start of the credit crisis including thousands at its Canary Wharf offices.
Mr Pandit said revenues hit $19 billion in January and February — almost equalling the $21 billion for the entire first quarter last year.
Citi recently turned to the US Government for a third bailout as it struggles to survive the carnage in financial markets.
The bank, created by the $85 billion merger of Citicorp and Travelers Group in 1998, will be 36% owned by the US taxpayer.
http://www.thisislondon.co.uk/standa...ers/article.do
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