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NEW YORK - CITIGROUP posted a smaller-than-expected quarterly loss, despite US$11.7 billion (S$15.8 billion) of write-downs and credit losses tied to deteriorating capital markets and a slumping economy.
Though the second-quarter loss totalled US$2.5 billion, the results soothed investors, who pushed shares of the largest United States bank by assets up US$1.53, or 8.5 per cent, to US$19.50 in afternoon trading on the New York Stock Exchange.
Citigroup shares, part of the Dow Jones industrial average, had bottomed on Tuesday at US$14.01, the lowest since the bank was created in a 1998 merger.
Investors have long sought signs that the New York-based bank, one of the hardest hit in the year-long global credit crisis, may finally be ready to turn a corner.
'Concerns of an imminent capital shortfall have abated,' wrote Mr Mike Mayo, a Deutsche Bank Securities analyst. He upgraded Citigroup to 'hold' from 'sell' but expressed concern about future write-downs and 'still negative' credit trends.
Citigroup's net loss totalled 54 cents per share, and was the bank's third straight quarterly loss. It compared with a year-earlier profit of US$6.23 billion, or US$1.24 per share.
The operating loss was US$2.22 billion, or 49 cents per share, as revenue declined 29 per cent to US$18.65 billion. On that basis, analysts on average had expected a loss of 67 cents per share on revenue of US$17.44 billion, Reuters Estimates said.
'All things considered, it was a decent quarter,' wrote Mr William Tanona, an analyst at Goldman Sachs.
Citigroup's report followed surprisingly strong profits this week from JPMorgan Chase and Wells Fargo, and a much larger-than-expected US$4.9 billion quarterly loss at Merrill Lynch.
Other major lenders report quarterly results next week.
Analysts expect Bank of America on Monday to say profit fell by more than half, and Wachovia and Washington Mutual on Tuesday to post big losses. -- REUTERS
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