Credit losses weighed down Citigroup's Q3 earnings.The company lost 0.27 cents a share.CEO Vikram Pandit said that,while consumer credit trends are improving internationally,the U.S. environment is still challenging.Citigroup experienced eight billion dollars in net credit losses.There was some improvement in late stage delinquencies,but there was still some stress in early stage delinquencies.Citi wrote down losses in leveraged loans,and it is likely that toxic asset losses will never be recovered.
The U.S. government owns a one-third stake in Citi,and Citi must pay the government and other investors dividends on preferred stock holdings.Prince Alwaleed bin Talal of Saudi Arabia,one of Citi's major shareholders,has urged the government to divest its position as soon as possible.This is unlikely to happen for some time,however,out of an abundance of caution.
Despite Citi's problems,Deutsche Bank has initiated coverage of the stock with a buy rating,and a target price of 5.50 a share.Citi did realize a Q3 profit of 101 million-much better than last year's Q3 loss of 2.8 billion dollars.An independent evaluation approved of Citigroup's management.
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