Citi Mixes Earnings Metrics, Trading Under Book Value (C)

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Citigroup Inc. (NYSE: C) is continuing to show some improvements from its near-implosion.  The money center bank reported earnings were about $3 billion and were reported as $0.10 EPS and revenues were roughly $19.7 billion.  Thomson Reuters had estimates of $0.09 EPS and revenue expectations were $20.55 billion.  This revenue figure is up 7% sequentially but is 22% lower from a year ago as its shrinks its operations.

This theme of light revenues for banks is not a new one.  Under the current climate, these banks are earnings far less on their very short-maturity assets and leverage seems to keep coming lower and lower through time.

Citi continues to shrink its balance sheet and assets were down 3% to $1.95 trillion.  Credit losses were $6.3 billion (down for 7 consecutive quarters) and it has another $3.2 billion as a provision for credit losses; but the total allowance for loan losses was $36.6 billion.  Citi’s Tier-1 capital ratio was 13.3% and its Tier-1 common equity ratio was 11.3%.  Its return on common equity was 7.3%.

What is interesting is that Citi claims a book value per share of $5.85 with a tangible book value per share of about $4.69. That tangible book value is what investors will key off and that was up $0.24 from the end of 2010.

Citigroup shares closed at $4.42 on Friday and the 52-week trading range is $3.53 to $5.15. The early indications have Citi shares trading up at $4.45 in pre-market trading. 

JON C. OGG