On October 15, 2009

Citigroup hit With Huge Credit Loss

Although some news outlets are downplaying Citigroup’s crummy quarterly results this morning, make no mistake — they indicate a banking company in severe distress. Although Citi reported a net profit of $101 million, down from $4.2 billion in the previous quarter, for common shareholders the company lost $3.2 billion, up from $2.9 billion in the year-ago period. Return on equity was -12.2 percent, down from 14.8 percent in the second quarter and right back were the company was at this time in 2008. Net interest revenue, a measure of how much Citi has to lend when factoring in funding costs, fell 10 percent. Besides, Citi’s profit largely stems from a deal this summer under which it exchanged preferred stock for…

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