More good news for US banks as Citigroup reports profit of $1.6bn

| April 17, 2009 | 0 Comments

Citigroup has today boosted the stock market by announcing its first quarterly net profit in almost two years.

The bank made a profit of $1.6 billion (£1.1 billion) for the first three months of 2009, compared to a loss of $5.1 billion in the last three months of last year, while revenues rose 99% to $24.8 billion in the first quarter.

Shares in the bank, which plummeted to a record low of $1.02 last month, gained 12.5%, to $4.51 in trading before the market opened.

The news comes as fellow US banks JP Morgan Chase and Goldman Sachs have both announced better-than-expected first quarter results.

Furthermore, earlier this month, Wells Fargo stunned investors by announcing it expects to report a record net profit for the first quarter.

Vikram Pandit, Citigroup’s chief executive, said: “We had our best overall quarter since the second quarter of 2007.”

The bank received a bailout to the tune of $54 billion from the US Government and has reduced its headcount by 13,000 since the end of 2008, to 309,000 today.

With regard to the billion-dollar loan Citigroup borrowed from the Government, Mr Pandit did not divulge as to when the loan will be repaid.

However, JP Morgan’s chairman and chief executive, Jamie Dimon, said he was eager to pay back the $25 billion it borrowed last autumn.

Meanwhile, Goldman Sachs has announced plans to raise $5 billion from investors to repay the $10 billion it borrowed.

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