Citigroup Inc. swung to a narrow profit in the third quarter on an $851 million gain from its securities-exchange efforts in the quarter that left the government owning a one-third stake in the company.
The bottom line wasn't as bad as analysts feared though the far-flung bank saw more credit losses and a build in loan loss reserve.
The stock fell 3.8% at $4.81 premarket. The stock is up nearly two-thirds the past three months.
Chief Executive Vikram Pandit Thursday reiterated that sustainable profitability is the company's main goal, praising its strong liquidity and capital base. He didn't give any details on repaying the Troubled Asset Relief Program except to say it will be a focus going forward.
The company has been walloped the past several years by its exposure to some of the exotic securities that were at the heart of the credit crunch as well as bad consumer loans. But it has been reducing its risk exposure and revamped its governance with more financial expertise.
Citigroup posted a profit of $101 million, compared with a year-earlier loss of $2.82 billion. But including preferred dividends, the company had a per-share loss of 27 cents in the latest quarter. Revenue increased 25% to $20.4 billion.
A survey of analysts by Thomson Reuters anticipated a 38-cent loss on revenue of $20 billion.
Tier 1 capital ratio, a key measure of financial strength, was 12.7%, down from 8.19% a year earlier and 12.74% in the last quarter.
Loan-loss provisions fell 2% from a year earlier to $8.77 billion, and slid from the second quarter's $12.67 billion.
Cash and deposits jumped 17% during the quarter while loans fell 11%.
Citi Holdings, the business the company plans to sell or scale back, had a $1.87 billion loss, narrower than the prior year's loss of $6.82 billion.