October 17, 2011, 8:21 am   Investment Banking

Citigroup Earnings Rise 74% to $3.8 Billion

By ERIC DASH

Jemal Countess/Getty Images for TimeVikram Pandit, chief of Citigroup.

5:14 p.m. | Updated with closing stock price.
With a big push from a one-time accounting gain, Citigroup on Monday squeezed out its seventh consecutive quarterly profit, but it faces significant challenges to growth.

Citigroup announced a third-quarter profit of $3.8 billion, or $1.23 a share, beating analyst consensus estimates of 81 cents a share. That represented a 74 percent increase from a year ago, when the bank announced a quarterly profit of $2.2 billion, or 72 cents a share.

But a big portion of that increase came from gains that will be difficult to repeat. Citigroup benefited from a paper gain of $1.9 billion, reflecting a sharp increase in the perceived riskiness of its debt — an accounting adjustment that gave JPMorgan Chase a similar earnings increase last week. Citigroup also delivered another $1.4 billion to its bottom line from money it had previously set aside to cover losses on credit cards and other loans. Together, those items accounted for more than 85 percent of the company’s earnings.

“Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results,” Vikram S. Pandit, Citigroup’s chief executive, said in a statement. In a contrast to the sober overtones when JPMorgan kicked off bank earnings season with its results on Friday, Citi executives were a bit more bullish about the broader economy.

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Bank Transfer Chatter Goes Global; CUNA, NAFCU Cite Site Surges

By Jim Rubenstein

Credit unions across the land are “seizing this marketing opportunity”, as CUNA officials put it Tuesday, to take advantage of the favorable industry media coverage following the announcement of Bank of America’s $5 monthly debit fee.

There also appeared to be stepped-up online chatter—even spreading internationally on blogs and Twitter—about the so-called “Bank Transfer Day” Nov. 5 when consumers are exhorted to move their funds from large banks to CUs and community banks.

“Credit unions are certainly making the most of this new awareness in the media,” declared Mark Wolff , senior vice president-communications, as the trade group counted the number of CUs reporting new account openings and surges at CU call centers from Boston to San Francisco.  

CUNA said traffic to its www.asmarterchoice.org site has “jumped eightfold since the Bank of America announcement” two weeks ago. CUNA said it also already counted “2,000 friend requests” on an added Facebook posting linked to “asmarterchoice.”

Meanwhile, one Irish blog hit on “Bank Transfer Day”, commenting on how the British Broadcasting Co. was covering the “Occupy Wall Street” protest and how it led a Los Angeles art dealer to reportedly hatch “Bank Transfer Day.”

"Why wait?" said NAFCU spokesman Patty Briotta. "We encourage people to explore their options and vote with their money every day and join a credit union.  We are greatly encouraged by the events of the last week and they have helped us raise awareness of the benefits of credit union membership."

She said that CULookup.com also has seen a "great upsurge in traffic.”

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