Citigroup Reports Higher Defaults

Citigroup reported net income of $4.3 billion for the second quarter of 2009, after taking $2.4 billion in credit losses on its residential mortgage portfolio. The New York banking giant said $12.1 billion or 6.5% of its residential loans are 90 days or more past due. On a dollar basis, seriously delinquent loans are up 88% from a year ago. The company did tout the fact that since 2007, it has worked with 625,000 homeowners to avoid a potential foreclosure on mortgages totaling over $67 billion. The second-quarter earnings report also shows that Citigroup reported a mark-to-market gain of $613 million on its subprime-related direct exposures (as opposed to a loss one year prior of $3.4 billion). It reported a loss of $390 million on mark-to-market and impairments on alt-A mortgages (one year prior, there was a loss of $277 million). Mark-to-market on its commercial real estate positions resulted in a loss of $354 million, an improvement from a loss of $480 million for the second quarter 2009.