Citigroup Cites Higher Servicing Revenue
Citigroup, the nation's largest bank holding company, said that its fourth-quarter earnings grew 30% from a year earlier, despite a decline in income from its consumer group. Still, the company saw improved home loan servicing results.
Citi's net income totaled $6.93 billion in the fourth quarter, with earnings per share coming in at $1.37. However, Citi said a $2.1 billion after-tax gain related to the sale of its asset management business helped generate the increase in net earnings. The company's global consumer group, which includes mortgage lending, saw its income decline by 9% in the fourth quarter. CEO Charles Prince said that despite a spike in bankruptcies related to the new bankruptcy law, underlying credit quality remained "favorable" throughout Citigroup's businesses. Citi said its consumer credit business in the U.S. saw $252 million in increased credit losses related to consumers filing ahead of the Oct. 17 deadline for changes in bankruptcy rules. With regard to its U.S. consumer lending business, Citi said that average loans grew by 17% and that mortgage servicing revenue increased.
However, these positives were partially offset by net interest margin compression.
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