What’s next for the bank?
Hot Headline: Citigroup can’t maintain its two-quarter gaining streak.
Hotter Headline: Vikram Pandit is immediately restructuring the bank.
Citigroup’s third quarter results are a disappointing report from the bank that still struggles to recover from the crisis and pay off its dues to the federal government. The New York Times writes, “The bank’s headline number — net income of $101 million — came before it accounted for $288 million in preferred dividends and a debt exchange that gives Washington 34 percent of earnings.
After including the items, the loss to stockholders was 27 cents a share, or $3.2 billion, compared with a loss of 61 cents a share, or $2.9 billion, in the third quarter a year ago. Revenue increased to $20.39 billion from $16.25 billion.”
Citigroup also sold Occidental Petroleum “to avoid a public showdown with the federal compensation specialist over a nine-figure bonus.”
After reading this, we can only say the following things:
1. Mr. Pandit should be preparing a more sober speech for investors.
2. The bank should head into a management review and restructuring ASAP.
3. There would still be issues regarding over compensation in the bank since only its oil arm was dismissed and not the top honchos in the bank itself.
4. We highly doubt that the last quarter will show signs of recovery.