Citigroup said today that second-quarter profit fell, largely because of a big charge to increase reserves for pending lawsuits.
Legal charges of $4.95 billion dented the bottom line but the world's largest financial services company was upbeat about the outlook for the credit market, which it said was the "best we have seen in years".
The New York-based company said net income totalled $1.14 billion, or 22 cents per share, compared with $4.3 billion a year earlier.
Profit was the lowest since Citigroup reported $677 million in the fourth quarter of 1998, when the company had expenses for the merger of Citicorp and Travelers Property Casualty Corp. Citigroup has $1.4 trillion of assets.
Retail banking income rose 15 per cent to $1.16 billion, credit card income rose 34 per cent to $1.01 billion and consumer finance income rose 14 per cent to $594 million.
Citigroup's corporate and investment bank posted a $2.81 billion loss. Capital markets and banking income rose 28 per cent to $1.5 billion, and transaction services income rose 45 per cent to $261 million.
Global investment management profit rose 7 per cent to $451 million, including increases of 15 per cent in life insurance and annuities and 9 per cent at the private bank, and a drop of 16 per cent in asset management.
Private client services profit rose 15 per cent to $209 million.
International profit surged 76 per cent to $2.83 billion, including increases of 50 per cent in Asia; 161 per cent in Europe, the Middle East and Africa; 34 per cent in Latin America, and 13 per cent in Japan.
Citigroup shares closed Wednesday at $45.10 on the New York Stock Exchange. They have fallen 7 per cent this year, while the Philadelphia KBW Bank Index has fallen 3 per cent.