Citigroup's 4Q profits pull down 2006 results

Banking giant Citigroup, which has been on the acquisitions trail, has reported a 26 per cent decline in quarterly net profits to $5.13 billion (Rs 22,818 crore). Citigroup attributed the decline to the costs at its Japanese arm for the lower comparative earnings in the three months to the end of December.

With the announcement of the fourth-quarter figures, Citigroup's annual profits for 2006 were $23.8 billion — 12 per cent lower than in 2005 on total revenues of a record $89.6 billion.

Results include previously disclosed charges of $415 million after-tax in the group's Japanese consumer finance to increase reserves and reposition the business. Return on common equity was 17.2 per cent. For the full year 2006, net income was $21.54 billion, or $4.31 per share, and return on common equity was 18.8 per cent.

According to Citigroup CEO Charles Prince, the company had seen "positive trends" in its core US market, which partly off-set regulatory changes in Japan where Citigroup reduced its operations.

A media release quotes Prince as saying that the banking group would "continue to expand our business through a balance of organic investment and targeted acquisitions".

In April 2006, US regulators lifted a one-year ban on the group from pursuing large scale takeovers, which was put in place after it was told to improve its business practices.

Since then Citigroup has led a consortium which acquired an 85 per cent in China's Guangdong Development Bank, and bought Grupo Financiero Uno and Grupo Cuscatlan in Central America.