7 billion this quarter after having lost 7

Vikram Pandit wanted. It was obtained. After five consecutive quarters of losses, Citi's CEO had the satisfaction to beat estimates of analysts and publish a net profit of 1.6 billion in the first quarter 2009. Performance is the result mainly of a few exceptional gains and utilization of favourable accounting rules. Thus, the sale of the Brazilian credit card subsidiary Redecard reported 708 million after tax. Recent changes to accounting rules on fair value ("fair market value") helped to reduce $ 631 million of charges on certain assets. Finally, the Bank was able to credit $ 2.7 billion to its balance sheet because of the decline of its debt.

Reported number of titles, the result is equivalent to a loss of 18 cents per share. This is due to the conversion, last January, of $ 12.5 billion of preferential shares, which had reduced the amount of the benefits available to shareholders, as payment of 1.2 billion in dividends.

Citi has continued its divestments and restructuring (13,000 employees and less for a total of 309,000 people), but has nevertheless managed to double its net banking product over a year earlier to $ 24.8 billion. Like its competitors, it has benefited from the first quarter of very positive bond trades, and in particular brokerage rates and exchange rates. The "institutional clients group, securities and banking" domestic revenues reached $ 7.2 billion (including $ 4.7 billion for the "fixed income" and 1.9 billion for the markets). On the other hand, other activities of the Bank have all declined. Bankcards have seen their income decline by 10, while their failure rate is now 10. Retail banking income decreased by 18 and that of asset management is withdrawal of 20. Anxiety related to consumer markets remains strong. According to Edward Kelly, the new financial Director of Citi, losses on loans "home equity" (based on the value of a house) and on credit cards could reach $ 6.6 billion in the next quarter.

Low of provisions

However, the Bank increased its provisions for losses $ 2.7 billion this quarter, after having lost 7.3 billion on some loans. Analysts wondered about this low provisions taken and on the ability of ISIC to stay profitable next quarter. Nothing says that if the bond trades as, recently, the market shares will remain well oriented. Moreover, the bulk of its activities apart from the Investment Bank suffer from the recession in the United States and around the world. Citi has also decided push by the transfer of 36 of its capital to the State (52.5 billion of preferential shares will be transformed into shares) after the publication of the tests of strength that the Government is moving to 19 institutions receiving public funds (see opposite). Currently, its Tier-1 capital ratio amounted to 11.8, but observers fear that the Bank, which has received public funds $ 45 billion and has more than $ 300 billion of the guarantee of the State on its assets, has new need for a capital injection. This explains why the title has lost 8.98 Friday.