Profits at Citigroup, the world's biggest financial services company, have been hit by a $1.55 billion (€1.45 billion) provision it has made to cover potential losses on loans and Enron-related litigation.
The group, which employs more than 1,200 people in the Republic, reported a 37 per cent fall in profits, following the charge. The New York-based company, which has more than $1 trillion in assets, earned $2.43 billion, or 47 cents a share, compared with $3.88 billion, or 74 cents a share, a year earlier.
Citigroup also said it would deliver double-digit income growth this year following an 8 per cent rise in earnings for all of 2002. It earned a record $15.28 billion last year.
Wall Street firms including Citigroup recently settled charges that they issued biased stock research to win business advising companies on mergers and new share offerings. This, plus loan losses and lawsuits over financing deals Citigroup arranged for bankrupt energy trader Enron, caused the company to take $1.3 billion in charges and boost loan loss reserves by $254 million in the quarter.
Wall Street expected Citigroup to earn 44-49 cents a share with a mean estimate of 46 cents a share, according to market data firm Thomson First Call.
Profits at Citigroup's consumer group, which includes credit cards and retail banking, rose 26 per cent in the quarter to $2.37 billion. But its corporate and investment bank posted a $344 million loss in the quarter, after the $1.3 billion charge.
Its proprietary investment activities, or investing it does for itself, posted a loss of $75 million because of write-downs in some emerging markets. - (Additional reporting by Reuters)
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)