Citigroup profits below expectations

Wall Street street sign Bailed-out bank Citigroup was among the biggest casualties when the credit-crunch hit Wall Street

Citigroup has reported a profit for the fourth quarter of 2010, but its shares have fallen on disappointment the results were not better.

Citi made $1.3bn (£811m) in the last three months of 2010, reversing a $7.6bn loss for the period in 2009.

It meant that full-year profits were $10.6bn, compared with losses Citi made in 2008 and 2009.

But investors were expecting better fourth-quarter numbers, and Citi's share price fell 5% on Wall Street.

"2010 was a year full of milestones and was critical for the turnaround of this institution," said Vikram Pandit, Citigroup's chief executive.

He said that core operations at the company, which employs about 11,000 people in the UK, had performed strongly. The profits were boosted by smaller provisions for bad debts.

However there was a sharp fall in Citi's fixed income revenues, money made from day-to-day trading in things such as bonds and credit derivatives.

"This was one of the weaker quarters for trading," chief financial officer John Gerspach told reporters in a conference call.

He also acknowledged that Citi had underperformed in other revenue-generating areas, including mergers and acquisitions.

Mr Pandit has sold assets, laid off staff, and is trying to focus Citi on its main businesses, including investment and retail banking.

The bank, rescued by the US taxpayer with a $45bn bail-out, is close to freeing itself from government ownership.

The US Treasury is preparing to sell its remaining stake in the bank, probably this year.

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