Word: city
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Dates: during 2000-2009
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...Street and the rest of the financial sector are finally seeing some sun, the storm clouds around Citigroup just don't seem to be breaking. The company said on July 17 that it earned $3.4 billion in its second quarter. It was the second quarter in a row that Citi had announced a profit, after many critics said the company was done for. In a press release, Citigroup CEO Vikram Pandit triumphantly said, "Our financial results today reflect the incredibly dedicated efforts of all of our people around the world and their success in implementing our plan...
...problem, it appears, is that few people think Citigroup's earnings rebound is sustainable. Following the bank's strong earnings announcement, analyst John McDonald, who covers Citi for Sanford C. Bernstein, cut his estimates of what the bank could make next year. Instead of his earlier projection that Citi would turn a profit in 2010, McDonald thinks the bank will be solidly in the red next year, losing $3 billion. In his report, McDonald said investors should worry about "the earnings power and strategic direction of the franchise amid all the change and increased government ownership now under...
...McDonald is not alone. David Hendler of CreditSights recently lowered his rating on Citi's stock to the equivalent of a "hold." Says Hendler: "Our view is that Citi is in the midst of a large scale disassembly of the global franchise, and the ultimate configuration of the company remains murky...
...Spooking analysts and investors is the fact that losses at several of Citi's businesses continue to grow. What's more, a number of executive departures are complicating the bank's turnaround efforts. Lastly, while Citi's lending losses are not growing as fast as they were, the bank's loans are still going bad at a higher rate than that of its rivals...
...Citigroup results indicate continued deterioration on the credit side," says Christopher Whalen, managing director of research firm Institutional Risk Analytics. "Citi is an outlier in terms of loss rates, above Bank of America and Wells Fargo...