Citigroup has reported a profit increase that was less than analysts estimated as litigation costs rose and benefits from releasing loan-loss reserves declined.
Bloomberg reports that net income climbed 25% percent to $1.2bn in the fourth quarter from $956m a year earlier, the New York-based firm said Tuesday in a statement.
Chief Executive Officer Michael Corbat, 52, took over in October and last month announced plans to eliminate about 11,000 employees and pull back from some emerging markets, undoing part of the expansion strategy of his predecessor, Vikram Pandit. Litigation costs included $305m from a settlement between U.S. banks and federal regulators, who were probing claims that lenders improperly seized homes.
'New management won’t mind sacrificing a little earnings in the fourth quarter to help make 2013 earnings goals easier to hit', Marty Mosby, an analyst in Memphis, Tennessee, with Guggenheim Securities LLC, said before earnings were released. 'They really aren’t going to be held accountable for what happens in the fourth quarter'.
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