After nearly two years of dismal news, Citigroup reported Monday, April 19, a profit of $4.4 billion for the quarter ended March 31, 2010. The positive report should buoy American taxpayers, who own 27% of the company after federal bailouts helped stem multibillion losses.
The first-quarter profit was a result of the rebounding economy overseas and improving bond market. These areas play to Citigroup’s strengths, which has a big presence in emerging markets and fixed income.
Citigroup achieved some of its turnaround through aggressive streamlining, like cutting loose its units in insurance and retail brokerage (it owns 49% of Smith Barney after selling a majority stake to Morgan Stanley, which releases results on Wednesday, April 21).
“Citi today is fundamentally a very different company from what it was only two years ago,” Vikram Pandit, Citigroup’s chief executive, said in statement.
The bank’s brokerage and asset management profit nearly tripled, to $86 million, from $31 million in the fourth quarter, on a 25% increase in revenue. Compared with the first quarter in 2009, before the Smith Barney sale, Citigroup’s asset and wealth management revenue fell 79%, to $340 million, but profit rose 69%.
Citigroup did not disclose detailed results for Smith Barney. The venture with Morgan, which employs more than 18,000 advisors, comprises 87% of Citigroup’s asset and wealth management assets.