Citigroup Raises Q1 Profits By 18 Per Cent

Apparently defying the weak markets, Citigroup raised first-quarter profits by 18 per cent, and enters the second quarter with a solid balance sheet and a 19.3 per cent return on equity. However, the consumer business accounted for more than half of the profit, and its returns were enhanced by both record low interest rates and the November purchase of Golden State Bancorp Inc. Consumer profit rose 26 per cent from a year earlier, to $2.15 billion, and the number of defaults and bad loans tailed off. Things look less pleasing on the wholesale side of the business, where Citigroup has yet to shake off its regulatory problems, with New York Attorney General Eliot Spitzer still investigating allegations that research was driven by investment banking considerations. Until the regulatory settlement is signed, the Citigroup share price is likely to remain under pressure.