The third-largest bank in the U.S. – Citigroup Inc. made a statement today, posting its profit for the second financial quarter that surpassed the analysts projections, after excluding the 3.7 billion dollars in expenses associated with a mortgage-bond settlement.
The Chief Executive Officer of the bank – Mr. Michael Corbat said in Citigroup Inc.s statement that was cited by Bloomberg: “Despite the significant impact of today’s settlement on our net income, our capital position strengthened.” Citigroups Basel 3 Tier 1 common-capital ratio rose to 10.6% in Q2 from 10.5% in Q1.
According to todays official announcement, the net income of Citigroup over the second fiscal quarter declined by 96% from 4.18 billion dollars to 181 million dollars. This reperesents a net income of 3 cents per share in comparison to the 1.34 dollars a share posted a year ago. Still, the profit of 1.24 dollars a share excluding special items beat the median analysts forecasts of 1.05 dollars per share.
The bank also disclosed that its revenue fell by 3% to 19.34 billion, which also surpassed the result of 18.93 billion dollars that was initially expected by analysts. The banks operating costs excluding the cost of the settlement declined by 3% to 11.8 billion.
The U.S. lender announced that it has agreed to pay $7 billion in compensation claims for misleading investors about mortgage bonds sold before the financial crisis. As Citigroup itself announced, $4 billion will be paid by the bank as a civil penalty to the U.S. Department of Justice. Another $500 million are to be paid to the Federal Deposit Insurance Corp. a dew states. In addition, the bank also reached an agreement of spending $2.5 billion on “consumer relief”.
The Chief Executive Officer of Citigroup Inc. – Mr. Michael Corbat said in the banks statement, which was cited by the Financial Times: “We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past.”
Citigroup Inc. was 3.26% up to trade at 48.53 dollars per share in New York today, marking a one-year change of -4.49%. According to the information published on CNN Money, the 27 analysts offering 12-month price forecasts for Citigroup Inc. have a median target of 58.00, with a high estimate of 67.00 and a low estimate of 46.00. The median estimate represents a +23.40% increase from the last price of 47.00.
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